President Trump has talked about bringing jobs back to the U.S. and replacing income tax revenue with foreign tariffs. However, income tax revenues average approximately $2 trillion annually, while the U.S. imports about $4 trillion in goods. This means that tariffs would need to be high or imports would need to increase significantly. The nonprofit Peterson Institute for International Economics (PIIE) says that if tariffs are 50%, tariff revenue could reach $750 billion annually. But then prices would go up, spending would go down and tariff revenue would fall, according to PIIE. On April 2, 2025, a 25% tariff is set to take effect on imported cars, light trucks and some auto parts.
Our Blog 