WHAT WILL THE US GOVERNMENT DO WITH THESE COLLECTED TARIFFS?
The tariffs paid by the US Import Companies will amount to hundreds of billions of dollars. This is money paid by US companies directly to the US government. Those US companies will either lose money by reduced profits or pass those increased costs on to US Consumers who will see those cost in increased prices.
If it walks like a duck and quacks like a duck, it is a duck.
Tariffs are taxes. They are similar to VAT taxes in that they are imposed across the board regardless of the economic position of the individual consumer. They are a “flat tax”. They apply to most goods and for every consumer.
And what will the US government do with these new revenues?
They may use them to pay down the National Debt (unlikely).
They may choose to use them to reduce the deficit.
In either way, they are taxes that increase revenue. And these taxes are not progressive like income taxes. They affect the lower and middle class the same as they do the upper class and super wealthy. The tariff on bananas is the same whether your household makes $40,000 per year or $1,000,000 per year.
Total purchases do vary by income bracket. The wealthier a family is, the more they spend on consumer goods, and therefore the more they pay into the tariff pool. Rebating the tariff revenue back to consumers CAN be progressive if the checks are equal for each and every family. However, if the rebates are scaled to, for example, income taxes collected, then the wealthy will receive a disproportionately high rebate. It this model is followed, then the tariff system will redistribute funds collected from the lower and middle classes to the upper and super-wealthy classes.