Investing.com-- U.S. President Donald Trump on Sunday said that his sweeping trade tariffs could help him cut income taxes for people making less than $200,000 a year, amid heightened anxiety over his economic agenda.
Trump repeated his past claims that revenue from trade tariffs could help the U.S. government reduce income taxes, although he has not elaborated on these claims.
“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,” Trump said in a post on Truth.Social.
Trump’s comments came before a May 2 deadline for the full imposition of his steep trade tariffs on China, which already appear to be sparking price increases for U.S. consumers. Media reports and social media posts over the weekend showed popular Chinese e-commerce platforms Temu and Shein had sharply increased their prices for U.S. customers last week.
A Bloomberg report showed U.S. customs duty collections surged over 60% in April, with the federal government collecting at least $15.4 billion in customs duties after the first wave of Trump’s tariffs.
But the figure is still a fraction of the income tax revenue collected by the federal government, and will need to be far greater to support Trump’s assertions of lower income tax.
Treasury data showed the government has collected about $2.26 trillion in tax revenue so far in fiscal 2025, with over 50% of the revenue coming from individual income taxes.
Trump had earlier this month unveiled a raft of sweeping trade tariffs on major U.S. trading partners, although backlash against his plan saw the President postpone most tariffs. But he hiked tariffs on China to 145%, sparking a bitter trade war between the world’s largest economies.