By The centerpiece of Trump’s budget proposal—a 10% baseline tariff on all imports—would fundamentally alter U.S. trade policy while generating an estimated $300 billion annually to fund permanent tax cuts.
Mechanics of the Plan:
- Replaces income tax brackets with two-rate system (15%/25%)
- Tariff revenue offsets corporate tax reduction to 18%
- “National Security Tariff” surcharge on Chinese goods
Industry Reactions:
| Sector | Impact |
|---|---|
| Retail | Prices ↑ 6-8% |
| Auto | $2,750/car cost increase |
| Agriculture | Retaliatory tariffs feared |
Historical Context:
This would be the largest shift to tariff-based revenue since 1913, when income taxes were introduced