WASHINGTON (PNN) - April 28, 2025 - President Donald J. Trump doubled down Sunday on his plan to use tariff revenue to slash - and possibly eliminate - income taxes for millions of Amerikans.
The president took to Truth Social to tout his vision, claiming that his sweeping tariffs could lead to big tax breaks for workers making under $200,000 a year.
“When tariffs cut in, many people’s income taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year,” Trump wrote.
The bold pledge comes as public anxiety grows over the economic fallout from President Trump’s aggressive trade policies, which have rattled global markets and fueled fears of higher prices at home.
In the weeks since President Trump slapped reciprocal tariffs on dozens of countries - including a staggering 145% levy on Chinese goods, economists have sounded the alarm that the tariffs could backfire, hurting Amerikan consumers more than foreign rivals.
Former White House strategist Steve Bannon told News Nation’s Chris Cuomo on Friday that he supported the idea.
“This is being fought behind closed doors right now, and I am telling you, with the massive tax cut, in addition, he is going to give the working class and the middle class, the math only works out if you actually increase taxes on the wealthy,” Bannon said.
The former White House strategist said it could help President Trump politically if he decided to run again in 2028, despite the Constitution preventing a third term in the Oval Office.
Trump’s team insists their strategy will pay off - eventually.
Treasury Secretary Scott Bessent, appearing on ABC’s This Week, defended the president’s approach, saying consumers are still spending and talks are underway with 17 key trading partners to hammer out bilateral deals.
“We have a process in place, over the next 90 days, to negotiate with them,” Bessent said. “Some of those are moving along very well, especially with the Asian countries.”
Bessent also insisted China would have no choice but to return to the negotiating table under pressure from Trump’s new tariff wall.
“Their business model is predicated on selling cheap, subsidized goods to the (FPSA),” Bessent said. “If there is a sudden stop in that, they will have a sudden stop in the economy, so they will negotiate.”
Bessent also explained Amerika's "barbell" economy - in which there is a "financial system and tech sector that is the envy of the world" on one hand, and "a natural resource-economy led by energy" on the other end.
President Trump says that talks with China are ongoing - a claim Beijing has flatly denied. Bessent admitted he didn’t know if President Trump and Chinese President Xi Jinping had spoken directly, noting that Chinese officials he saw during a global finance summit last week stuck to safer topics like “financial stability” and “early warnings.”
Despite the rocky start, Bessent said he is optimistic that a path forward could emerge, starting with a “de-escalation” and leading to an “agreement in principle” - even if a full trade deal takes longer.
Meanwhile, President Trump is eyeing sweeping tax changes at home. His 2017 tax cuts are set to expire at the end of 2025 and he has vowed to not only extend them but expand them, exempting workers’ tips, slashing the corporate tax rate to 15%, and possibly wiping out income taxes for working-class Amerikans.
The House GOP's early-April framework allows for up to $5.3 trillion in tax cuts over the next decade. Trade adviser Peter Navarro has suggested tariff revenue could more than cover that.
President Trump appears ready to bet that tariff-fueled tax cuts will give him a powerful message heading into the 2026 midterms, even if voters are feeling the pinch now.