The tariffs are raising $100 billion less than Trump expected. Pantheon Macro sees 3 reasons why, starting with China
Story by Nick Lichtenberg, Fortune, December 6, 2025
3. Surge in tariff-exempt AI equipment
The third factor diluting the overall AETR is a surge in imports of goods exempt from tariffs this year. Specifically, imports of “automatic data processing machines”—which largely include personal computers and advanced chips used for artificial intelligence—have soared. These imports now account for 9% of all total imports, a significant increase from 4% in 2024. This surge in high-tech imports actually disguised a 10% year-over-year fall in imports of other products in August.
This appears to be a one-off, or one-year kind of exception. “We think U.S. firms are depleting inventory of imported goods for now,” Pantheon wrote, adding the likelihood of the Supreme Court striking down roughly 60% of the current tariff regime under the IEEPA law “is temporarily incentivizing businesses to postpone placing new orders for imports.”
If the current tariffs remain in place, the one-year nature of this inventory depletion means tariff-applicable imports should recover next year, with Pantheon calculating them at $36 billion per month, with the AETR ticking up to 13%. “Even so, tariff revenues still would be much lower than the White House envisaged when it announced the rates.”
That said, the $400 billion annualized number is even larger than some other previous calculations that were deemed “ very significant” by Torsten Sløk, chief economist of Apollo Global Management. A respected voice on Wall Street, Sløk wrote in September that even a $350 billion revenue figure from tariffs represented a significant item in the U.S. budget. But each reduction in tariffs is wiping out more and more deficit reduction, with the CBO slashing its estimates recently to reveal something around $1 trillion in savings that have evaporated amid Trump reducing his levies on other countries’ goods.
In the meantime, the tariffs that remain are functioning more and more like a tax, since other countries and international companies don’t pay for them—U.S. companies and consumers do. LendingTree calculated tariffs will cost American shoppers some $29 billion this holiday season, while investment bank UBS states it plainly: “ The tariffs are a big tax increase.” The most immediate impact of the trade regime is felt in rising prices, which are “keeping things elevated.” Estimating a weighted-average tariff rate of 13.6%, UBS calculated that tariffs will add 0.8 percentage points to core PCE inflation in 2026, erasing roughly a year’s worth of disinflation progress.
The tariffs are raising $100 billion less than Trump expected. Pantheon Macro sees 3 reasons why, starting with China |
