Where does tariff money go?

Trump tariffs: 104% tariff expected on China

The Trump administration says that a 104% tariff on China will go into effect at midnight. Experts explain where the money from the tariffs is expected to go.

President Donald Trump has levied tariffs on $3.2 trillion in goods imported into the United States.

On Tuesday, White House press secretary Karoline Leavitt confirmed that Trump’s threats of even higher tariffs on China would become a reality after midnight, when imports from China are taxed at a 104% rate.

READ MORE: White House confirms 104% tariff rate for China to start at midnight

The economic effect of tariffs will soon be felt by consumers, mostly in the form of higher prices.

Experts say there may be a small benefit as the cost of importing goods into the country goes up.

Where does tariff money go?

While the tariff turmoil continues, FOX 26 viewers are asking where the money from tariffs will go.

A tariff is a tax on imported goods, paid by the people and businesses that bring them into the country.

Collected tariffs go directly into the U.S. Treasury, while importers may raise prices to recoup the added cost.

President Trump says the government will make money off tariffs, while we've heard consumers will pay more.

What they're saying:

"The producer is writing the check, as opposed to you or I," says University of Houston economist, Dr. Dietrich Vollmer, in describing a shipment of goods from China, "You're paying for it, in the sense that the prices that Walmart charges you for the Chinese goods are going to be higher, so Walmart can pay the producer more, so the producer can cover the million dollar check to the Treasury."

How will tariff money be spent?

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Dig deeper:

In 2024, the US collected about $77 billion in tariffs.

While the Trump Administration has suggested this new round will be worth trillions over the years, there is not agreement among economists.

Experts say before the government can spend the money that there needs to be a clear decision about whether the tariffs are a permanent moneymaker, or a temporary bargaining tool to equalize trade among economic partners.

There is no, clear, information on how or where that money could be spent.

Gas prices expected to drop

Local perspective:

Analysts expect gasoline prices to come down by about 15 cents a gallon in the next couple of weeks.

The price of oil has fallen dramatically, closing at just over $58 per barrel. That's the lowest we've seen in more than four years.

Experts say tariffs are expected to push the demand for oil down.