💵 Where Is All The Money From Tariffs Going?

In today’s newsletter I discuss where all the money from tariffs is going, OpenAI is giving the U.S. gov’t ChatGPT for $1 a year, the ESPN+ app is launching August 21st, Elon Musk announced a new Tesla Full Self-Driving model, Ethereum just celebrated its 10th anniversary, and ESPN and the WWE have announced a five-year deal worth more than $1.6 billion dollars.

Scroll on!

The Business Behind The News

Top Story

💵 Where Is All The Money From Tariffs Going?

In recent months, the United States has seen a substantial rise in tariff revenue, with monthly customs duties reaching new records. According to the U.S. Treasury Department, the government has collected nearly $30 billion dollars in tariff revenue in July 2025 alone. This represents a staggering 242% increase compared to July of 2024. Since April 2025 when President Donald Trump introduced a universal 10 percent tariff on most imported goods, followed by higher levies, the total collection has surpassed $100 billion dollars. The government's fiscal year, which ends on September 30, 2025, has seen customs duties grow to become the fourth largest source of federal revenue, behind only individual withholdings and corporate taxes.

President Donald Trump has repeatedly celebrated the influx of money from tariffs, stating that it is a historic windfall for the nation. He’s put forward a few different ideas for what to do with all that money. One of President Donald Trump’s suggestions is that the tariff revenue could be used to help pay down the national debt, which now exceeds $36 trillion dollars, but that’s kind of a boring idea and Americans don’t seem very interested in the whole national debt conversation these days. 

Another idea President Donald Trump had was giving some of the money back to American citizens in the form of "tariff rebate checks." That got a lot of people’s attention, but it’s worth noting once again that tariffs are a tax on the American people, so if we’re going to give them essentially a rebate check, then why the heck did we implement tariffs in the first place?

The U.S. Customs and Border Protection department is responsible for collecting tariffs from importers at the country's various ports of entry. All revenue collected by the federal government, regardless of its source, goes into a general fund managed by the Treasury Department. The money from tariffs is then deposited into the Treasury Department’s General Account, which is the government's primary checking account. The Federal Reserve Bank of New York holds this account and acts as the government's bank. This is where all the money from taxes and other sources is held before it is spent by Congress.

While the tariff revenue has helped narrow the federal budget deficit slightly and reduce the amount of new borrowing needed, it is not being kept in a separate account or used for one specific purpose. The government has a budget deficit of $1.4 trillion dollars for the 2025 fiscal year, and the new tariff money will only help a little bit to offset this deficit, but it is not enough to eliminate it or to significantly pay down the national debt this year.

The sharp rise in tariffs is also having an impact on American consumers and businesses. Like I said before, tariffs are a tax on the American people, so if you tax them you’re taking more money out of their pockets, which means they have less money to spend on goods and services - you know, the things that fuel our economy. The economic burden of these higher taxes is often passed on to consumers through increased prices for goods. 

As a rule, the Federal Reserve aims to keep inflation in check around 2%. In June of 2025 the inflation rate rose to 2.6% percent, up from 2.4% percent in May.

It is ultimately the American consumers and companies who are paying tariffs to the federal government, and these new tariff policies are not just a source of government revenue, but also a factor in how consumers and companies decide to spend their money, which will have a direct effect on our country’s economic landscape in the coming years.

🤖 Business

On August 6, 2025, OpenAI announced a partnership with the U.S. General Services Administration (GSA) to give every federal executive branch agency access to ChatGPT Enterprise for 1 year for a whopping $1 dollars a year. Yes, you heard that correctly. This initiative is part of the "OpenAI for Government" program, which was announced by OpenAI's CEO Sam Altman and GSA Acting Administrator Michael Rigas. The deal also includes an additional 60-day period with unlimited use of advanced models and features like Deep Research and Advanced Voice Mode.

The GSA's Federal Acquisition Service Commissioner, Josh Gruenbaum, mentioned that pilot programs in states like Pennsylvania and North Carolina showed impressive results. Employees in Pennsylvania, for example, were able to save an average of 95 minutes per day using the tool. I imagine the next news we’ll hear is additional layoffs from the increased efficiency of government employees thanks to their use of ChatGPT. So you can thank the U.S. government for helping to usher in the era of AI replacing humans.

📺 Entertainment

ESPN's new flagship streaming service is set to launch on Thursday, August 21. The ESPN "unlimited" plan will cost $29.99 dollars per month, and will include all of ESPN's linear networks including ESPN, ESPN2, ESPNU, and ESPN Deportes, their Spanish language network. A lower priced "select" plan will also be available for $11.99 dollars per month, which is the same as the current ESPN+ offering. A special introductory bundle with ESPN, Disney+ and Hulu will be available for $29.99 dollars per month for the first 12 months.

The Walt Disney Company CEO Bob Iger called the enhanced ESPN app a "sports fan's dream." In a new deal announced this week, the NFL will acquire a 10% stake in ESPN in exchange for ESPN acquiring the NFL Network and its popular RedZone feature. This is great deal for sports fans, as long as they’re willing to pay more for content they used to get for cheaper with their cable subscriptions.

🚘 Tech

On August 6, 2025 Elon Musk announced that Tesla is training an upgraded Full Self-Driving model with 10 times the parameters and a big improvement in video compression. The new software, which could be ready for public release by the end of August, is a key focus for the company after its revenues fell by 16% to "$16.7 billion dollars" in the second quarter. With the FSD software costing "$12,000 dollars" to purchase and a monthly subscription of "$99 dollars a month," a successful update would certainly be a welcome boost for the company. This being Tesla, I'm sure it’ll be a perfectly smooth ride for everyone involved with no hiccups or delays.

🪙 Crypto

On July 30, 2025, Ethereum celebrated its 10th anniversary. The network, which was initially described in a white paper by Vitaly Dmitrievich Buterin, raised approximately $18 million dollars in its initial coin offering and has since grown to a market capitalization of around $478.69 billion dollars. These days the Ethereum network brings in over $2.7 billion dollars in fees per year through "gas fees" paid in its native ETH token. A portion of these fees are paid to validators for processing transactions, and another portion is permanently removed from circulation, which helps the value of ETH to increase due to the scarcity of the crypto token.

🏈 Sports

ESPN and the WWE have announced a five-year deal worth more than $1.6 billion dollars that will make ESPN the exclusive home in the U.S. for all WWE premium live events starting in 2026, according to an interview with ESPN’s Chairman Jimmy Pitaro, WWE’s President Nick Khan, and TKO Group Holdings’ President Mark Shapiro announcing the deal, which calls for ESPN paying the WWE, which is owned by TKO, an average of $325 million per year for the next five years. It seems these days the best way to get people to watch your new streaming service is to buy the content they are already watching somewhere else.

Was this email forwarded to you? Did you not hate it?

Then consider subscribing to our irl Media NEWSletter. The only newsletter that brings you the business behind the news, with a healthy dose of sarcasm - all delivered to your inbox every Tuesday and Thursday in an easily digestible 5-minute read.

irl Media NEWSLETTER is written, edited, and published by Chris Thompson.