"And many Republicans see tariffs as a means to pay for extending Trump's tax cuts."

[whopis01]

22. Here is how I see it working

When you say that "consumers will cut back on spending", I think it is more correct to say "consumers will cut back on purchasing".

Meaning that they will be spending the same amount, just getting less for it. Consumers have a limited budget to spend from. As prices increase across the board, a larger percentage of that money will be spent on essentials. So spending doesn't really go down - just what you get for that amount of money goes down.

In the case of tariffed products, the additional cost is a tax, paid for by the consumer. Those consumers are receiving the same income and paying the same income tax - so this is in addition to what taxes they would have paid otherwise. So there are your additional taxes to offset cuts elsewhere.

The lower you are on the income scale, the greater a percentage of your budget goes towards essentials. That means you have less choices to reduce spending, or even invest instead of spending. The higher percentage of essentials in your budget, the harder you will be hit by this and the more taxes you will end up paying.