President of America donald trump While delivering the first ‘State of the Union’ address of his second term, he made a strong statement regarding tariffs and trade policies. He said that the tariffs collected from foreign countries will replace income tax in future. However, this statement of Trump seems to be only to woo people.
US President Donald Trump gave the first ‘State of the Union’ address of his second term on Tuesday (local time). Ahead of the midterm elections in November, he strongly defended his economic, trade and immigration policies.
In his speech, Trump made trade and tariffs an important issue. He reiterated that tariffs paid through foreign countries could replace the modern income tax system in future. Donald Trump said during his speech, “Over time, I believe that tariffs paid through foreign countries will, as before, substantially replace the modern income tax system and remove a great economic burden from my beloved people.”
Trump believes that tariffs i.e. duties on imports are a reliable source of income for the government, especially from countries with which America has a long trade deficit. When America imposes tariffs on the goods of these countries, it generates billions of dollars in income, through which the government can raise money for its work without charging much tax from the common American.
Trump believes that over time the revenue from tariffs could grow enough to reduce or completely replace the income taxes charged on citizens.
According to the report of US Customs and Border Protection, between January 20 and December 15, 2025, America’s Customs and Border Protection (CBP) collected tariffs of more than $ 200 billion. This has become possible only after Trump’s tariff order.
According to official government data, America had collected a total of about $ 4.2 trillion in income tax in the financial year 2025. Of this, about $3.33 trillion was individual income tax and about $0.88 trillion was corporate income tax.
It is America’s largest source of tax income and more than half of the federal government’s total revenue comes from income tax. The revenue of the entire federal government was about $5.26 trillion in FY 2025.
It is clear that what Trump is claiming is completely bogus and is being done only to woo people. Abolishing the income tax would have a devastating impact on America and could never be replaced by tariffs imposed elsewhere.
