Trump tariffs could help clear the way for bigger tax cuts as Congress eyes a potential revenue windfall

[TomCADem]

It is amazing how through a combination of racism directed at immigrants and isolationism, Republicans got working class Americans to support what amounts to a huge regressive sales tax through a tariff, which will be used to finance tax cuts to the rich. Heck, even unions like the UAW and Teamsters are jumping on the tariff band wagon even as it drives the US into recession. This is taken straight out of the Herbert Hoover playbook.

https://fortune.com/2025/04/05/trump-tariffs-bigger-tax-cuts-social-security-income-congress-revenue-economy-recession/

But the flip side of the much higher-than-anticipated duties is a potential revenue windfall that could help clear the way for getting bigger tax cuts passed in Congress.

Lawmakers have already taken a key step toward that end. Early Saturday morning, Senate Republicans approved a framework to extend Trump’s tax cuts from his first term, add new cuts like ending taxes on Social Security income, and slash spending.

Some fiscal conservatives in the GOP have balked at the massive deficits and debt more tax cuts could bring. But economists at Citi Research said in a note on Thursday that the aggressive tariffs “may now become a justification for larger tax cuts.”

It’s unclear if tariffs will remain as high as announced (Chinese imports face a 54% levy) or for how long, as Trump has suggested he is open to negotiating rates lower while his authority for imposing them could also face legal challenges.