President Donald Trump's tariffs poured billions into U.S. coffers in July, setting yet another monthly record for customs duty collections. Treasury Department data released Tuesday shows $27.7 billion in duties came in last month — up from $26.6 billion in June and $22.2 billion in May, and more than triple the roughly $8 billion collected a year earlier. That puts the fiscal year-to-date total at about $135.7 billion, with two months still to go before the September 30 close.
Trump has been quick to tout the surge. In a Truth Social post Tuesday, he called the revenue "incredible for our Country, its Stock Market, its General Wealth, and just about everything else."
But here's the part that had people scratching their heads: the U.S. government's gross national debt just crossed $37 trillion, according to an Aug. 11 Treasury report. And despite those tariff windfalls, Washington is still soliciting voluntary "gifts" from the public through Pay.gov.
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That disconnect was exactly what sparked a pointed post on Reddit — and it wasn't from an armchair economist. The author runs a company with fewer than 10 employees and low seven-figure revenue, doing everything in-house from design and programming to manufacturing, marketing, shipping, and customer service. But they can't avoid certain imported components.
"I cannot redesign my product to use only US components… We cannot," the owner wrote.
Then came the reality check: "My costs have increased about 9% so far due to tariffs. I refuse to increase my prices. So these tariffs come directly out of my pocket. It is another tax on my wife and I. Costing me tens of thousands of dollars a year."
The supply chain chaos isn't helping. "My supply chain is in complete disarray. I essentially have to write a blank check since component costs will carry the tariff charges. That is a moving target." By this point in a normal year, they'd already have purchase orders locked for the next one. "I don't have a single order in place for next year. I can't operate like this. I can't work to expand my business. R & D has been completely stopped. WTF? Can one of you economists explain to me why this is happening?"
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As the title of his post put it, he wanted an answer to a simple question: "Does anyone know exactly where these tariff dollars end up?"
The comments came fast. Some offered explanations, others vented the same frustration. One reply cut to the chase: "Clearly not the national debt since the government has launched pay.gov for people to gift money to the government."
A few explained that tariff revenue is collected by Customs and Border Protection, sent to the U.S. Treasury, and goes into the general fund — not earmarked for debt repayment. From there, Congress decides how it's spent.
Others zeroed in on the business angle. Several said holding the line on prices can only last so long before it wipes out margins. Passing costs to customers might sting, but it's often the only sustainable move.
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Practical tips included checking product codes to ensure the correct tariff rate, renegotiating supplier terms, and benchmarking competitors' pricing to avoid permanently eating the costs. Some urged the owner to keep detailed records — supplier quotes, tariff charges, and impact reports — in case they needed to push back.
Politics inevitably crept in, but most stuck to the nuts and bolts. Broad tariffs, they said, can blow up production schedules because they shift costs mid-order. That "moving target" the poster mentioned resonated with other business owners in the thread.
The Pay.gov angle kept resurfacing. To many, it just didn't add up: billions flowing in from tariffs, yet Washington still passing the digital hat. Whether you agreed with the frustration or not, it was hard to ignore the sentiment captured in one of the most repeated comments: "Not the national debt…" — a one-liner that summed up the mood.
For the original poster, the questions remain unanswered. The tariffs are still here. The costs are still rising. And the orders for next year? Still not placed.
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