Tariffs: Negotiating tool? Meant to replace income tax? Which is it? (1 Viewer)

[Airyaman]

So Trump yesterday was saying that tariffs would be able to replace income taxes. He said it in a tweet/truth, and then he said it live:



So if that is the case, then tariffs are here to stay.

But then his treasury secretary, on the very same day, is still talking about trade deals.



Now, please explain to me how both of these would work together. Obviously we cannot maintain tariffs and expect any country to negotiate, much less remove any of their tariffs or other economic "barriers" to American goods.

So either tariffs will replace income taxes (Trump) or they are just a negotiating tool meant to create multiple new trade deals (Bessent).

It can't be both.

 

[bongsaway]

We have to wait for option three before making our pick.

 

[ttwtt78640]

We’ll have to see what happens.

 

[Callen]

If any Trumper says they understand what Trump's goal is with tariffs I sayb.....BS you do. Even his closest economics guys don't know.

 

[Mycroft]

So Trump yesterday was saying that tariffs would be able to replace income taxes. He said it in a tweet/truth, and then he said it live:



So if that is the case, then tariffs are here to stay.

But then his treasury secretary, on the very same day, is still talking about trade deals.



Now, please explain to me how both of these would work together. Obviously we cannot maintain tariffs and expect any country to negotiate, much less remove any of their tariffs or other economic "barriers" to American goods.

So either tariffs will replace income taxes (Trump) or they are just a negotiating tool meant to create multiple new trade deals (Bessent).

It can't be both.

It can be both.

Some countries will negotiate. Some won't. The ones who won't will be providing tariff payments.

 

[Greenbeard]

So Trump yesterday was saying that tariffs would be able to replace income taxes. He said it in a tweet/truth, and then he said it live:



So if that is the case, then tariffs are here to stay.

One thing we can say for certain, Trump's not a numbers guy.

 

[Simon W. Moon]

It can be both.
Some countries will negotiate. Some won't. The ones who won't will be providing tariff payments.

remind us

Which countries are going to pay Trump's tariffs?

 

[ttwtt78640]

One thing we can say for certain, Trump's not a numbers guy.

TrumpSpeak often contains numbers, but they change frequently and have little basis in reality.

 

[Airyaman]

It can be both.

Some countries will negotiate. Some won't. The ones who won't will be providing tariff payments.

So how will limited tariffs work to replace income taxes? Will it mean a slight reduction in rates across the board? Because the tariffs would have to be blanket and at ~125% to replace income tax revenue. Putting selected tariffs on certain countries isn't going to replace anyone's income taxes.

 

[RedFishBlueFish]

So how will limited tariffs work to replace income taxes? Will it mean a slight reduction in rates across the board? Because the tariffs would have to be blanket and at ~125% to replace income tax revenue. Putting selected tariffs on certain countries isn't going to replace anyone's income taxes.

Trump will do what he did before. Give huge income tax reductions to the rich and corporations and give just enough of a break to the rest of the population that he can brag to them about his tax cuts. Then the middle and lower income Americans will pay for Trump's tariffs, via price increases, more than wiping out any income tax reductions.

And the dumb MAGAs will be ecstatic about their tax cuts.

 

[Airyaman]

Let me revise the numbers to be more realistic, because the ~125% blanket tariff is not correct (saw a few people using it, I think they meant all other government revenue, not just income taxes).

In 2024, the US imported ~$4.11T in goods and services. For the same year, the government received $2.4T in income taxes (total government revenue was $4.9T). So in order to replace income taxes, you would need a blanket tariff rate on all imported goods and services of ~58%. Now the problem with that is that people will likely start to spend less on non essential goods, thereby reducing the tariff income by some unknown amount.

If we would need 58% tariff rate on all imports, and Trump negotiates deals with some countries to reduce tariffs, that would mean he would need to raise the rate on imports of other countries by some unknown amount, which would likely price them out of the market and therefore those imports would no longer be purchased, again lowering tariff revenue.

Please try to explain how any of this is going to work.

 

[Loulit01]

The stupid shit that comes out of Trump's mouth on a daily basis would clog every toilet in Manhattan.

 

[ttwtt78640]

Let me revise the numbers to be more realistic, because the ~125% blanket tariff is not correct (saw a few people using it, I think they meant all other government revenue, not just income taxes).

In 2024, the US imported ~$4.11T in goods and services. For the same year, the government received $2.4T in income taxes (total government revenue was $4.9T). So in order to replace income taxes, you would need a blanket tariff rate on all imported goods and services of ~58%. Now the problem with that is that people will likely start to spend less on non essential goods, thereby reducing the tariff income by some unknown amount.

If we would need 58% tariff rate on all imports, and Trump negotiates deals with some countries to reduce tariffs, that would mean he would need to raise the rate on imports of other countries by some unknown amount, which would likely price them out of the market and therefore those imports would no longer be purchased, again lowering tariff revenue.

Please try to explain how any of this is going to work.

The federal “budget” problem is having $4.9T of annual federal revenue and $6.8T of annual federal spending.

 

[hooligan]

remind us

Which countries are going to pay Trump's tariffs?

They still don't understand the fundamentals of how tariffs work - after all this time.

It's more than a little frightening, to be honest.

 

[Airyaman]

The federal “budget” problem is having $4.9T of annual federal revenue and $6.8T of annual federal spending.

That's a subject for another thread, and it's been done before, multiple times.

 

[Simon W. Moon]

They still don't understand the fundamentals of how tariffs work - after all this time.

It's more than a little frightening, to be honest.

the whole set of phenomena are creepy af tbh

 

[Mycroft]

remind us

Which countries are going to pay Trump's tariffs?

What part of "The ones who won't" do you not understand?

 

[Simon W. Moon]

What part of "The ones who won't" do you not understand?

Do Americans ever pay any of the tariffs on imported goods from countries who Trump tariffed?

 

[Deuce]

It can be both.

Some countries will negotiate. Some won't. The ones who won't will be providing tariff payments.

lmao this guy, like Trump, thinks foreign government pay tariffs.

 

[Mycroft]

Do Americans ever pay any of the tariffs on imported goods from countries who Trump tariffed?

Some do. It depends on a number of factors.

 

[Mycroft]

lmao this guy, like Trump, thinks foreign government pay tariffs.

The fact is that some foreign governments DO pay the tariffs. China did back in 2018-2019.

 

[Simon W. Moon]

Some do. It depends on a number of factors.

How often do the countries with tariffed goods pay the tariffs on those goods?

Do they pay the tariffs sometimes too?

 

[Tettsuo]

The fact is that some foreign governments DO pay the tariffs. China did back in 2018-2019.

Importers pay the tariffs.

 

[RedFishBlueFish]

Let me revise the numbers to be more realistic, because the ~125% blanket tariff is not correct (saw a few people using it, I think they meant all other government revenue, not just income taxes).

In 2024, the US imported ~$4.11T in goods and services. For the same year, the government received $2.4T in income taxes (total government revenue was $4.9T). So in order to replace income taxes, you would need a blanket tariff rate on all imported goods and services of ~58%. Now the problem with that is that people will likely start to spend less on non essential goods, thereby reducing the tariff income by some unknown amount.

If we would need 58% tariff rate on all imports, and Trump negotiates deals with some countries to reduce tariffs, that would mean he would need to raise the rate on imports of other countries by some unknown amount, which would likely price them out of the market and therefore those imports would no longer be purchased, again lowering tariff revenue.

Please try to explain how any of this is going to work.

I don't think Trump intends the revenue from tariffs be used to balance the budget (or apply toward the budget or our debt). I think his intent is to lower the taxes for corporations and the rich, and use the tariff revenues to offset that loss to the country's revenue. He want to take the proceeds from tariffs and give it to the rich and corporations. Maybe throw some crumbs to the middle and lower classes.