Challenges of Implementing Tariffs for Revenue

Trump’s strategy to maintain tax cuts relies heavily on the imposition of tariffs, aiming to recoup lost revenue from other taxes. However, economic analysis suggests that the revenue generated from tariffs is minimal compared to income and corporate taxes, making it challenging to replace them entirely. According to the Peterson Institute's analysis, the maximum revenue from tariffs would still fall short of the current tax income, necessitating prohibitively high rates that could backfire and stifle imports. Additionally, retaliatory tariffs from other nations could escalate into a trade war, complicating the situation further and affecting global consumers.