“He has the authority to impose higher tariffs... But he doesn’t have the authority to unilaterally cut income taxes”

In the week that the second Trump Administration passed the 100-day mark, President Donald Trump has reiterated his bold economic claims. The long-promised trade tariffs have finally been introduced and Americans will be wondering when they will reap the benefits.

Trump took to Truth Social last weekend to promise wide-scale tax reductions, writing: “When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year."

It’s a bold claim, one that has already been challenged by a number of economists. Trump has long hinted that he would like to replace part of the tax system with additional tariffs on foreign-made goods. This time around he looks fully intent on pushing ahead with a radical change that could upend the US taxation system.

What will the Trump tariffs mean for taxes?

As it stands, imports from China will be hit with tariffs as high as 145% while other nations will get a flat rate of 10%. The President previously claimed that his tariffs could raise “trillions of dollars” in the next year, an enormous figure if realised. However economists have largely disputed Trump’s claims, suggesting that it could take up to a decade to generate the sort of sums that he has promised.

Furthermore, his claims on tax reductions have been challenged. It has been pointed out that while Trump can impose tariffs (relatively) freely, the business of lowering and raising taxes is left to Congress.

Erica York, vice president of federal tax policy at the Tax Foundation, has argued that there is “no real connection” between Trump’s tariffs and the promised lowering of taxes.

She explained: “He has the authority to impose higher tariffs, and he’s done that. But he doesn’t have the authority to unilaterally cut income taxes — that’s done by Congress.”

Aside from that structural issue, York has disputed the figures put forward by the President. She estimates that Trump’s tariffs will raise, at most, around $170 billion this year. But if Trump wants to wipe out individual taxes for those earning less than $200,000 it would leave a whole in the budget of around $700 billion.

“You would need tariffs multiple times higher than what we have now‚" York explained, describing Trump’s promises as “an impossibility.”

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