Tariffs & Trade · 2026-02-24
Tariffs could substantially replace federal income taxes
Misleading
Trump said tariffs paid by foreign countries could “substantially replace the modern day system of income tax.”
What the evidence shows
Individual income taxes account for a much larger share of federal revenue than tariffs. Economists note that raising tariffs enough to replace income taxes would shrink imports and the taxable base; importers in the United States, not foreign governments, remit the duties.
Assessment notes
The claim is partly predictive; the assessment addresses the feasibility of replacing income-tax revenue and the inaccurate premise about who pays.