The U.S. Treasury Secretary has announced that the U.S. has generated about $100 billion from tariffs this year. This amount could climb to $300 billion by 2025 as new trade policies take effect. In May, customs revenue hit $22.8 billion, which is nearly four times higher than the same month last year. During the first eight months of fiscal year 2025, tariff collections reached $86.1 billion, with $63.4 billion collected over five months.

Projected Tariff Income

The Congressional Budget Office estimates that the U.S. will earn $2.8 trillion in tariff income over the next ten years. However, the Secretary thinks this estimate might be too low. Recently, new measures have been introduced, including a 50% tariff on copper imports. Additional tariffs are expected for the semiconductor and pharmaceutical industries. In summary, the U.S. government is earning significantly more from tariffs—taxes on imports—than in recent years. May alone saw nearly $23 billion collected through customs, a staggering increase from the previous year. In just eight months, collections have reached $86.1 billion, with a third of that coming in only five months. These increases are not random; they are the outcome of stricter trade policies affecting industries and supply chains at multiple levels. Long-term forecasts suggest that the U.S. budget office anticipates about $2.8 trillion in tariff income over the next decade. Yet, Yellen believes this figure may be conservative. She likely considers how the combined effects of new tariffs, particularly on essential manufacturing materials like copper, might boost revenue even faster. The 50% copper tariff is quite significant, as it greatly restricts imports and reduces reliance on foreign suppliers of this vital metal used in construction and electronics. Furthermore, forthcoming tariffs on semiconductors and pharmaceuticals—two industries with extensive global supply chains—indicate a clear trend. These are targeted adjustments, likely prompting companies to rethink their sourcing strategies. Major firms may revise contracts, change logistics paths, or increase domestic production. This impacts us not just in terms of overall revenue but also in how these changes influence commodities and transport.

Impact on Derivatives and Inputs

In light of these tightening policies, we are observing adjustments in the forward pricing of industrial metals. The copper tariff alone is expected to raise domestic prices and could shift the price differences between U.S. and foreign futures. Those trading copper-related derivatives need to reassess their contract strategies, as traditional spreads may no longer match the same risk profiles. Volatility could increase as companies adjust at varying rates. Some may quickly switch to domestic suppliers, while others might face delays or shortages. As these adjustments shape expectations, yield curves might begin to reflect the inflationary effects of higher input costs, particularly in sectors dependent on advanced materials. We should monitor credit default swap (CDS) pricing for companies heavily reliant on semiconductor inputs, as they could experience cost pressures before being able to pass those costs down the chain. There’s potential for short-term disruptions before prices stabilize. Margin assumptions may also need revision. Clearly, the pace of treasury revenue collection is faster than many expected at this stage, which could change auction dynamics and pressure risk-free interest rates. As a result, rate expectations might remain elevated longer than anticipated, even if consumer inflation slows. Overall, this surge in tariff revenue puts pressure on logistical networks, alters commercial lending and shipping insurance, and impacts commodity-related derivative markets. It’s wise to view these increases not as momentary spikes, but as signs of a stricter policy approach with tangible downstream effects. Future valuation shifts are likely to revolve around concrete changes—like metal supplies, pharmaceutical costs, and chip manufacturers’ expenses—rather than mere speculation. In trades related to non-ferrous metals, you should now reassess assumptions regarding delivery costs, counterparty risks, and currency exposure. What once seemed like seasonal noise in monthly data is now changing too quickly to ignore. Positions that were reviewed weekly may now need more frequent monitoring. Market makers already appear to be incorporating these measures into their pricing, indicating that changes are happening faster than predictions suggest. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now