In a Truth Social post Sunday morning, Trump declared that Americans earning under $200,000 could see their income taxes “substantially reduced” or “completely eliminated” thanks to his sweeping tariffs on imports.
“It will be a BONANZA FOR AMERICA!!! THE EXTERNAL REVENUE SERVICE IS HAPPENING!!!” Trump wrote.
He added that “massive numbers of jobs” are already being created, and that new factories and plants are being built across the U.S.
The Tariff Economy Vision
Trump envisions returning to a Gilded Age-style system, where federal revenues come primarily from tariffs instead of income taxes.
Earlier this month, Trump signed an executive order imposing a 10% baseline tariff on most imported goods, and much higher rates — up to 145% — on goods from countries like China.
“When tariffs cut in, many people’s income taxes will be substantially reduced, maybe even completely eliminated,” Trump said.
Economic Skepticism Mounts: Economists are warning that Trump’s plan could fall drastically short. A Council on Foreign Relations study estimates that tariff revenues would come $65 billion short of replacing federal income taxes for Americans earning under $150,000.
Even Trump’s own former adviser Peter Navarro’s projection — $600 billion in tariff revenue — has been questioned. Moody’s economist Mark Zandi estimates it could be closer to $100-$200 billion.
Meanwhile, polls show public trust is slipping:
- 69% of Americans believe the Trump administration has not done enough to lower prices (CBS News poll).
- Trump’s economic approval rating has dropped to 42%.
Trade Tensions & Market Uncertainty
Trump’s tariffs have already rattled global markets and sparked retaliation, with China slapping 125% tariffs on U.S. goods.
After facing backlash, Trump recently admitted he would “come down substantially” from the steep 145% tariffs — but insisted they won’t go down to zero.
The Federal Reserve’s Beige Book also reports growing uncertainty among American businesses since the new tariffs took effect.
What’s Next? Trump hinted that new trade deals could be finalised “in a few weeks,” but also admitted that negotiating with dozens of countries at once is “physically impossible” — and that the U.S. may instead simply “set prices for deals.”
Trump’s dream of using tariffs to fund the federal government is unprecedented in modern American history. While it’s fueling fierce political energy, economists warn that the numbers may not add up — and that American consumers and the middle class could ultimately bear the biggest burden.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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