President Trump has outlined a two-part plan for tariff revenue, aiming to pay down the $37 trillion national debt and potentially distribute dividends to Americans. According to a Fortune report, however, current tariff collections fall short of even covering monthly interest payments on U.S. debt.

Read also: U.S. Customs Busts $400 Million Tariff Evasion Scheme

Treasury data shows July interest expenses reached $60.95 billion, including $38.1 billion on Treasury notes and $13.9 billion on bonds. Tariff revenue for the same period totaled $29.6 billion. IndexBox data indicates this gap persists despite record tariff income under the Trump administration.

The White House suggests tariff proceeds could eventually contribute $360 billion annually toward debt reduction—less than 1% of the total. Economists question the feasibility, noting the government requires $1.8 trillion in annual borrowing. Wharton professor Joao Gomes told Fortune that tariffs might slow debt accumulation but won’t meaningfully reduce it.

Market reactions remain mixed. While Treasury yields have held steady, some analysts warn of growing investor skepticism. Gold prices rose 27% over the past year, signaling potential concerns about Treasury stability. The Conference Board reports foreign entities hold 26% of U.S. debt, creating vulnerability if confidence erodes.

The administration maintains its policies will improve the debt-to-GDP ratio, currently at 121%. Proposed measures include security buybacks totaling $40 billion in August 2025, though this marks a $10 billion reduction from previous plans.

Source: IndexBox Market Intelligence Platform