Markus Andrews

The U.S. Department of Education will restart the process of involuntary collections, including wage garnishments, as early as May 5.
For five years, collection activity on federal student loans has mostly been paused.
Here’s what borrowers should know about their rights.

Blackcat | E+ | Getty Images

What payments can be garnished?

The U.S. government has extraordinary collection powers on federal debts and it can seize borrowers’ federal tax refunds, wages, and Social Security retirement and disability benefits, according to higher education expert Mark Kantrowitz.
The federal government can intercept other funds such as state income tax refunds and lottery winnings, Kantrowitz said.
In some cases, federal student loan borrowers can also be sued by the U.S. Department of Justice, and face a levy on the funds in their bank accounts, he said.

How much money can be taken?

Social Security recipients can typically see up to 15% of their monthly benefit reduced to pay back their defaulted student debt, but beneficiaries need to be left with at least $750 a month, experts said.
Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York, said she was especially concerned about the consequences of resumed collections on retirees.
“Losing a portion of their Social Security benefits to repay student loans could mean not having enough for food, transportation to medical appointments, or other basic necessities,” Rodriguez said.

Meanwhile, your entire federal tax refund can be seized, including any refundable credits, Kantrowitz said. Fortunately, if you’ve already received your 2024 federal income tax refund, “the government cannot claw it back,” Kantrowitz said.
As for your wages, the federal government can garnish up to 15% of your disposable pay without a court order, Kantrowitz said. Wages of federal workers may be easier to seize, he added.

How can I avoid collection activity?

Take steps to get out of default and to try to avoid the start of any garnishments, experts said.
Borrowers in default will receive an email over the next two weeks making them aware of the new policy, the Education Department said. You can contact the government’s Default Resolution Group and pursue a number of different avenues to get current on your loans, including enrolling in an income-driven repayment plan or signing up for loan rehabilitation. 
Some borrowers may also be eligible for deferments or a forbearance, which are different ways to pause your payments, Rodriguez said.
“We’re advising clients to request a retroactive forbearance to cover missed payments, and a temporary forbearance until they can get enrolled in an income-driven repayment plan,” she said.

If you do end up facing the garnishment of your Social Security benefits or wages, the government is required to provide you with notice before it starts its collection activity, Kantrowitz said. For your wages, a 30-day warning is required, while 65 days’ notice must be given before the seizure of Social Security benefits, he said.
You may have the option to have a hearing before an administrative law judge within 30 days of receiving a wage garnishment order, Kantrowitz said. Your wages may be protected if your employment has been spotty, or if you’ve filed for bankruptcy, he said.
“Borrowers can also challenge the wage garnishment if it will result in financial hardship,” Kantrowitz said.
You can dispute the offsets to your Social Security benefits, too, he said, by contacting the Education Department. The notice you receive should provide information on whom to contact.
Are you worried about the garnishment of payments such as wages or Social Security benefits? If you’re willing to share your experience for an upcoming story, please email me at [email protected].

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Coinbase is removing fees for purchases of PayPal’s dollar-backed stablecoin
Coinbase and PayPal will collaborate on “stablecoin based solutions” for payments and commerce as well as potential use cases for PYUSD in decentralized finance.
Earlier this week, stablecoin titan Circle, which has a revenue agreement with Coinbase, debuted a payments network for financial institutions, challenging a major part of PayPal’s business.

Omar Marques | Lightrocket | Getty Images

Coinbase is removing fees for purchases of PayPal’s stablecoin as part of a broader effort to increase the use of the coin, and an attempt to boost on-chain payment opportunities for consumers and institutional users. 
In a blog post Thursday, Coinbase said it aims “to accelerate the adoption, distribution and utilization” of the PayPal USD (PYUSD), the U.S. dollar-pegged stablecoin that has lagged the market since it launched in 2023. With a market cap of only about $730 million, PayPal USD controls less than 1% of the market for stablecoins tied to the dollar. Tether’s USDT and Circle’s USDC, dominate the market with 66.5% and 28.3% shares, respectively, according to CryptoQuant.

PayPal said the companies will also collaborate on “stablecoin based solutions” for “moving or managing money around the world, particularly in commerce,” as well as potential use cases for PYUSD in decentralized finance and other on-chain platforms.
“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center and driving further utility and adoption for digital currencies among developers, customers, and other users,” said Alex Chriss, PayPal president and CEO.
Stablecoin race
The race for payment stablecoins has been heating up on expectations that Congress will pass its first piece of crypto legislation, focused on stablecoins, in the third quarter. Historically, stablecoins are primarily used for trading and borrowing in the crypto market. More recently, stablecoins have become more appealing to institutions aiming to transfer value, particularly in dollars, across the globe more cheaply and efficiently outside the traditional financial system.
Earlier this week, USDC issuer Circle – which earlier this month filed to go public – debuted a payments and remittance network aimed at financial institutions, challenging a major part of PayPal’s business. Ripple, the cross-border payments company and creator of the XRP cryptocurrency, launched its Ripple USD stablecoin (RLUSD) in December. 
PayPal’s two-sided network of more than 430 million consumers and merchants, “offers an unprecedented opportunity to increase stablecoin adoption globally,” Coinbase CEO Brian Armstrong said in a statement.

The crypto exchange operator has long set its sights on building a global economy that runs on cryptocurrency, using stablecoins as a means to diversify its revenue away from crypto trading. Coinbase has an agreement with Circle to share 50% of the revenue from the USDC stablecoin — and Armstrong said on the company’s most recent earnings call that it has a “stretch goal to make USDC the number 1 stablecoin.”
Circle declined comment to CNBC.
Crypto payments integration
Coinbase also has big ambitions for Base, its self-built network for Ethereum-compatible applications.
“We’re moving with haste to integrate crypto payments across our entire suite of products – we think that will be a big business over time – and we’re also solidifying Base as the number one chain … for start-ups to build on-chain,” Armstrong said on the earnings call.
“We can really fuel a lot of [stablecoin] growth by driving more partnerships with global and local players like Stripe and Yellow Card to do more global adoption,” he said on the same call with analysts and investors. “We’ve been adding a number of additional stablecoin trading pairs on our platform.”
As part of Thursday’s update, Coinbase users will also be able to redeem their PYUSD for dollars directly on the Coinbase platform, mirroring a USDC capability. Previously, users were required to move their PYUSD onto one of the PayPal platforms (PayPal, Venmo or Paxos) for redemption.
On Wednesday, PayPal introduced a 3.7% annual rewards rate on PYUSD balances, paid in more PYUSD, to boost adoption of the stablecoin.

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Amid tariff volatility, older investors may consider a bond ladder to help preserve their nest egg.
The strategy, which includes an allocation of bonds with staggered maturities, can prevent selling assets when the stock market is down.
As bonds mature, you can use the proceeds to cover living expenses or reinvest the cash.

Robert Daly | Ojo Images | Getty Images

Manage the ‘sequence of returns’ risk

Typically, you should avoid selling assets when the stock market is down, especially during earlier retirement years. Those early withdrawals paired with market dips can stunt your long-term portfolio, known as the “sequence of returns risk.”
Negative returns are more harmful early in retirement than later because you could miss more years of compound growth, according to a 2024 report from Fidelity Investments.
That’s why flexibility is important when it’s time to pull funds from your retirement savings, Caswell said. 

Caswell recommends a bond ladder of Treasuries that mature every six months or one year for up to five years. You can also use the ladder method with certificates of deposit. 
As assets mature, you can use the proceeds to cover living expenses. Alternatively, you could reinvest part of the cash if you receive more than you need, he said.
The strategy provides “more transparency and control” of when you’re taking money out of that part of your portfolio, Caswell said.

Create a ‘TIPS ladder’

You could also weigh a ladder of so-called Treasury inflation-protected securities, or TIPS, according to Amy Arnott, a portfolio strategist with Morningstar Research Services.
Issued and backed by the U.S. government, TIPS can provide a hedge against inflation because the principal rises or falls based on the consumer price index. 
“Inflation and loss of purchasing power can be a risk with bonds, which is why a TIPS ladder can be attractive,” especially when you’re able to get a positive return, she said. More

New market turbulence may tempt investors to have more cash set aside.
But experts warn it’s possible to have too much money in savings.

Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC

Warren Buffett is sitting on a record amount of cash.
That’s not necessarily something everyday investors should emulate. If you have money on the sidelines, it may be time to rethink your strategy, experts say.

Buffett’s conglomerate Berkshire Hathaway, with a diverse portfolio of businesses, was sitting on a record $334 billion in cash at the end of last year.
Yet in a February letter to shareholders, Buffett told shareholders that “despite what some commentators currently view as an extraordinary cash position,” the majority of the money invested in Berkshire is in equities.
“Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned,” Buffett wrote.
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In hindsight, Buffett’s cash position looks wise, as Trump administration tariff policies have caused market turbulence.

Investors have also been thought to have a cash cushion. There is $6.88 trillion in money market funds as of the week ending April 16, according to the Investment Company Institute — even though higher interest rates have made it possible to earn more on cash.
Yet even as the markets have flirted with bear territory, experts still say it’s possible to have too much money on the sidelines.

A 60/40 portfolio beats cash in the long run

Boy_anupong | Moment | Getty Images

A traditional portfolio comprised of 60% stocks and 40% bonds almost always outperforms cash in the long run, according to recent JPMorgan Asset Management.
That is based on a classic 60/40 portfolio comprised of the S&P 500 index and Bloomberg US Aggregate Bond Index versus cash based on Treasury bills or a certificate of deposit equivalent, according to Jack Manley, global market strategist at JPMorgan Asset Management.
In looking at data over 1995 to 2024, the 60/40 portfolio beat cash on a one-month basis roughly 65% of the time, Manley said. On a six-month basis, that increases to 75% of the time. For one year, that climbs to 80% of the time. And by the time you hit 12 years, it’s 100% of the time, he said.
Yet in times of uncertainty, investors often feel safer in cash.
“When we think about investors making the wrong decisions — investing with their guts, not with their brains, where they are going to if they’re panicking — they’re going to cash,” Manley said.

How to balance cash and investing

In the stock runup of 2024, a “plain-vanilla version” of a 60/40 portfolio gained about 15%, according to new Morningstar research. The portfolio includes a 60% weighting in the Morningstar US Market Index and 40% in the Morningstar US Core Bond Index.
Yet a diversified portfolio of 11 different asset classes only gained about 10%, the research found. That included larger cap domestic stocks, developed markets stocks; emerging markets stocks; Treasuries; U.S. core bonds; global bonds; high yield bonds; small cap stocks, commodities; gold and REITs.
Major shifts in U.S. tariff policy may change how well those strategies perform going forward. Thus far in 2025, a diversified portfolio has held up better, with gold gaining about 32% this year, according to Amy Arnott, portfolio strategist at Morningstar. Meanwhile, commodities, global bonds and real estate have held up better than U.S. stocks, she said.

With interest rates higher, cash has been a better portfolio diversifier than Treasuries in recent years, according to Morningstar’s research.
Notably, those cash allocations are best held outside the portfolio in an emergency fund or for any large expenses that may come up in the next two years, Arnott said. Current retirees may want to have at least one to two years’ worth of portfolio withdrawals in cash, she said.
With current turmoil and market uncertainty, it’s important to remember that making radical shifts to your portfolio can often backfire, Arnott said.
“If you’ve had an asset allocation that was a good fit for your time horizon and your investment goals previously, it’s probably not a good idea to be making dramatic changes to that just because of all the uncertainty that’s going on right now,” Arnott said.

Investors who have an ample cash position to fit their needs do tend to feel more confident now, said Adrianna Adams, a certified financial planner and head of financial planning at Domain Money.
However, for those who already have a sufficient emergency fund, the best use for extra cash is typically in the markets, Adams said.
“I wouldn’t recommend holding cash if we’re using that account or allocation towards our long-term goals,” Adams said. “If we’re going to need the money in the next two years, then absolutely, we should keep it in cash.”
High-yield savings accounts tend to be a favorite among consumers for emergency funds, Adams said. However, individuals in high-income tax brackets may want to consider municipal money market funds that help limit the tax bills they will pay on the interest they earn on that money, she said. More

While Americans are increasingly concerned about their financial standing, consumer spending has picked up.
Even though spending is higher now, financial constraints coupled with expectations that the economy is weakening will cause consumers to cut back in the months ahead, experts predict.
“That is a self-fulfilling prophecy,” says Wharton’s assistant professor of finance Sasha Indarte.

While many Americans are worried about where the U.S. economy is heading, few have changed their spending habits in anticipation of a slowdown.
Nearly three-quarters, or 73%, of adults said they are “financially stressed,” with most pointing to the tariff wars as the culprit, according to a recent CNBC/SurveyMonkey online poll.

And yet, consumer spending has remained remarkably resilient.
In part because of looming tariffs, shoppers are panic buying. In fact, consumer spending was even stronger than expected in March, according to the Commerce Department and ticked up again in April, data released Wednesday from J.P. Morgan showed.
J.P. Morgan also raised its odds for a U.S. and global recession to 60%, by year end, up from 40% previously.More from Personal Finance:Cash may feel safe when stocks slide, but it has risksWhat higher stagflation risks mean for your moneyShould investors dump U.S. stocks for international equities?

Setting the stage for a slowdown

Consumer spending is considered the backbone of the economy because it represents a significant portion of Gross Domestic Product and fuels economic growth.
In a speech earlier this month before business journalists in Arlington, Va., Federal Reserve Chair Jerome Powell said “the economy is overwhelmingly driven by consumer spending.” Powell also said that he expects President Donald Trump’s tariff policies to raise inflation and lower growth.

Most experts agree that in the face of higher prices for many consumer goods, Trump’s tariffs are igniting a fresh wave of declining sentiment, which plays a big part in determining where the economy is headed.
The Conference Boards’ expectations index, which measures consumers’ short-term outlook, plunged to its lowest level in 12 years and well below the recession threshold, signaling heightened recession risk. The University of Michigan’s consumer survey also showed sentiment sank by more than 30% since December among persistent worries of a trade war.
“On-again, off-again rising tariffs and resulting turmoil in the stock market and world economy are clearly impacting consumer concerns about higher prices and future consumer spending growth,” Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement.

How tariffs impact household budgets

The Trump administration’s tariffs on a host of other countries are currently in the middle of a 90-day pause, with a 10% baseline tariff rate instead applying to all imported goods across the board. The pause is due to expire on July 9, with Trump touting a series of rate negotiations with foreign leaders between now and then.
According to an analysis by the Urban-Brookings Tax Policy Center, if the lower tariff rates in effect during the 90-day pause remain in effect permanently, it could reduce real income for the average taxpayer by about $3,100 in 2026. A separate study by the Budget Lab at Yale estimates that tariffs could cost the average household roughly $3,800 per year.
“Household budgets remain under pressure and highly sensitive to further price increases,” said Greg McBride, chief financial analyst at Bankrate. “Inflation will continue to be central to how consumers feel about their finances, and their capacity for additional spending.”

A looming drop off

Financial constraints coupled with expectations that the economy is weakening will eventually cause consumers to spend less, which can cause businesses to cut back or lay off workers, according to Sasha Indarte, an assistant professor of finance at University of Pennsylvania’s Wharton School. “That is a self-fulfilling prophecy.”
“Even a small initial cutback in spending gets amplified,” she said. “One person’s spending becomes another person’s income — you can get this echo effect.”
But basic economic theories don’t tell the whole story, Indarte added.
Even when consumers intend to cut back, they don’t always scale back their spending as much as they want to, or should. Behavioral biases and inertia also play a role, according to Indarte.

“Even when our environment is changing, we are happy doing what we used to be doing. People are used to going to the same restaurants, or driving the same car, we aren’t used to making adjustments,” she said. “There’s a preference for sameness.”
However, once household budgets reach their limits, consumers will no longer be able to afford the lifestyle they were accustomed to — that’s “when the shock materializes,” she said.
At that point, consumers will have to reign in their spending, whether they want to or not, she said, which could lead to an economic drop-off in the months ahead. That prediction was also recently shared by JPMorgan analysts in a research note on Wednesday and Federal Reserve Bank of Chicago President Austan Goolsbee on Sunday.
“We should be worried,” Indarte said.  
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In some California metro areas, a third of 25- to 34-year-olds live with their parents, according to Pew Research Center.
Young adults stand to save about $13,000 a year by living at home, according to a Federal Reserve report.
Demographics — and their interplay with personal finances — appear to be the primary driver of high shares of young adults living with their parents in certain metros, Pew found.

Catherine Falls Commercial | Moment | Getty Images

In some California cities, it’s common for parents to have roommates: their adult children.
Three California metro areas host the highest shares of 25- to 34-year-olds living in a parent’s home relative to other U.S. metros, according to a new analysis by Pew Research Center, a non-partisan research organization.

In the Vallejo and Oxnard-Thousand Oaks-Ventura metros, 33% of young adults were living with their parents in 2023, Pew found. (Those metros are in the San Francisco Bay Area and outside Los Angeles, respectively.)
In El Centro, east of San Diego near the U.S.-Mexico border, 32% of young adults live at home, according to Pew.
Those shares are significantly higher than the 18% U.S. average. In some metros, the share is as low as 3%.
Young adults can save about $13,000 a year by living with their parents, according to a 2019 Federal Reserve analysis. About half of those savings — $6,400 — is from housing and utility costs, it found.
Nationally, 50% of parents with a child older than 18 provide them with some financial support, averaging $1,474 a month, according to Savings.com.

Metros with high, low shares of young adults at home

These are the 10 metro areas with the highest shares of 25- to 34-year-olds living with their parents in 2023, according to Pew:

Vallejo, Calif. — 33%
Oxnard-Thousand Oaks-Ventura, Calif. — 33%
El Centro, Calif. — 32%
Brownsville-Harlingen, Texas — 31%
Riverside-San Bernardino-Ontario, Calif. — 30%
Merced, Calif. — 30%
McAllen-Edinburg-Mission, Texas — 29%
Naples-Marco Island, Florida — 29%
Racine-Mount Pleasant, Wisconsin — 29%
Port St. Lucie, Florida — 29%

These are the 10 metro areas with the lowest shares of 25- to 34-year-olds living with their parents in 2023, according to Pew:

Odessa, Texas — 3%
Lincoln, Nebraska — 3%
Ithaca, New York — 3%
Bloomington, Indiana — 3%
Bozeman, Montana — 4%
Cheyenne, Wyoming — 4%
Wausau, Wisconsin — 5%
Midland, Texas — 5%
Manhattan, Kansas — 6%
Bismarck, North Dakota — 7%

Demographics are a driving force

Demographics — and their interplay with personal finances — appear to be the primary driver of high shares of young adults living with their parents in certain metros, said Richard Fry, a senior researcher at Pew and co-author of the analysis.
There are fewer white young adults and more Hispanic, Black and Asian young adults in the top 10 metro areas with the largest proportions of 25- to 34-year-olds living at home, Fry said. (The one exception is Racine, Wisconsin.)
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“Areas where there are more minority young adults tend to have more young adults living at home,” Fry said. “That’s not always the case, but it is a pattern.”
Black and Hispanic young adults are less likely to have a college degree and tend to have lower earnings as a result, Fry said.
“Being able to live independently may be more of an issue for them,” he said.
The typical Black or Hispanic worker, age 25 to 34, earned about $46,000 a year in 2022, according to the National Center for Education Statistics. The typical white young adult worker earned $58,000.
Part of the reason may also be cultural, Fry said. There are likely other factors at play like cost of living, though the correlation isn’t as strong, he said.

Many of the metros with low shares of young adults living at home are college towns, Fry said.
For example, Ithaca, New York, hosts Cornell University, and Bloomington, Indiana, has Indiana University, Fry said. Many young adults here are likely university graduates who are well-educated and opt to stay there after they graduate instead of moving home, he said.
Nationally, the share of young adults living at home climbed starting in the early 2000s, peaking at 20% in 2017, according to Pew. (It declined to about 18% in 2023.)
Unemployment spiked during the Great Recession and it took many years for the labor market to heal, Fry said. Meanwhile, young adults today are more likely than older generations to be saddled with student debt. More

The Trump administration is cracking down on federal student loan borrowers who fell behind on their bills.
At the same time, new borrowers are preparing to enter the student loan system.
A recent study found that incoming college freshmen could rack up $40,000, on average, in education debt by graduation.

Valerie Plesch | The Washington Post | Getty Images

The U.S. Department of Education is taking aggressive steps to restart collections on federal student loans that are in default — just as current high school seniors are set to rack up new balances on their path to a college degree.
Currently, around 42 million Americans hold federal student loans and more than 1 million high school graduates will take out new education debt in the months ahead, according to higher education expert Mark Kantrowitz.

By the time they graduate college, these students could each borrow as much as $40,000, on average, in federal and private aid to earn a bachelor’s degree, according to a new NerdWallet analysis of data from the Education Department, up from $37,000 the year before.
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The college affordability problem

Every year, new students are pumped into the student loan system while many current borrowers struggle to exit it. Despite historic student loan forgiveness efforts under former President Joe Biden, the country’s education debt tab has mostly ticked higher.
“We haven’t been able to get our arms around the college affordability problem more broadly,” said Michele Zampini, senior director of college affordability at The Institute for College Access & Success. “There are new enrollments every semester and the pile up continues.”

Around 45% of 2025 high school graduates will go on to a four-year college, according to NerdWallet, and more than one-third of them will take out student loans to help cover the tab.

College tuition costs have risen significantly in recent decades, averaging a 5.6% annual increase since 1983, outpacing inflation and other household expenses, according to a separate report by J.P. Morgan Asset Management. And families now shoulder 48% of college expenses, up from 38% a decade ago.
“Most people don’t have the money to make those payments out of pocket,” Zampini said.
To bridge the gap, students and their families have been borrowing more, which has boosted total outstanding student debt to more than $1.6 trillion.

In a Wall Street Journal op-ed Monday, U.S. Secretary of Education Linda McMahon said that some institutions make “empty promises to students while pocketing their loan dollars.”
“Colleges and universities call themselves nonprofits, but for years they have profited massively off the federal subsidy of loans, hiking tuition and piling up multibillion-dollar endowments while students graduate six figures in the red,” she wrote.

Deep cuts in state funding for higher education have also contributed to significant tuition increases and pushed more of the costs of college onto students, other reports show.
These days, tuition accounts for about half of college revenue, while state and local governments provide much of the rest, according to the Center on Budget and Policy Priorities. But roughly three decades ago, the split was much different, with tuition providing just about a quarter of revenue and state and local governments picking up the bulk of the difference.
“We’ve haven’t actually seen a good faith effort to work through that comprehensive problem,” Zampini said. “What we’ve seen instead is a bit of an attack strategy on higher education in general.”
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President Donald Trump in a recent Fox interview said “there is a chance” that tariff revenue could replace the federal income tax.
However, some policy experts are skeptical of the idea, based on the potential tax base and other factors.
There’s currently a universal tariff rate of 10% on imports from most countries and 145% on imports from China.

A forklift transports shipping containers among stacks of containers in Hamburg Port in Hamburg, Germany, April 15, 2025.
Sean Gallup | Getty Images

Tariff tax base is ‘a lot smaller’ than income tax

Some policy experts have questioned how much revenue the duties could bring in, compared with the federal income tax. 
“The tariff tax base is a lot smaller than the income tax base,” Kimberly Clausing, a senior fellow at the Peterson Institute for International Economics, told CNBC.
In 2023, the U.S. imported $3.1 trillion of goods, according to a report Clausing co-authored in June. By comparison, the government levied tax on more than $20 trillion in income, the report said.
White House trade advisor Peter Navarro in late March estimated tariffs could raise roughly $600 billion a year.
But that figure “is not even in the realm of possibility,” Mark Zandi, chief economist at Moody’s, told CNBC earlier this month. “If you get to $100 billion to $200 billion, you’ll be pretty lucky.”
To compare, the IRS has collected $1.14 trillion in individual income taxes for fiscal year 2025 through March 31, according to Treasury data.

“Tariff rates would have to be implausibly high on such a small base of imports to replace the income tax,” Clausing co-wrote in the Peterson Institute’s report.
Plus, at higher tariff rates, people will buy fewer imported goods, which reduces revenue, Clausing told CNBC: “That’s part of the point of the policy.”
The Trump administration did not respond to CNBC’s request for comment.

Other factors can lower tariff income

As tariff rates increase, other factors can decrease how much revenue the U.S. ultimately collects, experts say.
“The administration seems to think that every time it raises the tariff rate that it can collect more revenue,” the Tax Foundation’s Durante said. “And that’s not always the case.”
Direct tariff revenue is lowered by behavioral and other economic factors, according to a Tax Foundation report published April 15.

The Tax Foundation estimates that a 10% universal tariff would raise $2.2 trillion through 2034. However, the same tariff would reduce U.S. gross domestic product by 0.4%, which affects revenue, it said.
The International Monetary Fund on Tuesday reduced 2025 U.S. growth projections to 1.8% from 2.7% based on trade tensions. More