Governments are slightly weird, financially. For most people and businesses, money is analogous to water. For governments, with a fiat currency, they create and destroy it.

Money is “created” when the government “spends”. It then flows through the system. Eventually, it is “destroyed” when it is taxed. The goal isn’t to keep the amount of currency the same, but to control the “pressure” in the system. Too much pressure (money) causes inflation. Too little causes financial issues.

So in short, tariffs either go to the government coffers, or get destroyed, depending on how you look at the system.