Compliance Costs May Exceed Tariff Revenue, Cato Study

Scott Lincicome of the Cato Institute warns that the most damaging feature of the Trump administration’s tariff program is not only higher duties but the unprecedented bureaucracy attached to them.

He writes that U.S. policy has shifted from a simple structure in 2017 to 17 overlapping tariff measures under seven legal regimes, with nearly half of U.S. imports now governed by Chapter 99 rules.

This surge, he argues, represents a structural shift: what was once a narrow, exceptional tool has become a dominant feature of U.S. tariff administration, pulling routine commercial shipments into an intricate regulatory system that many firms are struggling to manage.

Lincicome cites five sources of what one professional called “death by a thousand papercuts”:

• multiplying legal authorities,
• expanding coverage of special measures,
• constant revisions and exemptions,
• surging CBP guidance requests amid stricter enforcement, and
• a far more complex liability-calculation process.

He concludes that regulatory burdens may now exceed the roughly $30 billion in monthly tariff payments.

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