Treasury Secretary Scott Bessent has suggested that revenue generated from President Trump’s tariff policies could potentially offset federal income taxes. Speaking at a White House briefing, Mr. Bessent indicated this approach might be incorporated into upcoming tax legislation, aligning with Mr. Trump’s recent criticisms of the income tax system.
The administration’s “Liberation Day” tariff plan imposed a blanket 10% levy on all imports, with higher rates targeting countries that sell significantly to U.S. consumers while purchasing relatively few American products. The president has paused these tariffs for numerous nations to allow for negotiations, with India, South Korea and Japan reportedly making the most progress toward potential deals involving reduced trade barriers in exchange for tariff relief.
The situation with China remains particularly complex, with retaliatory measures resulting in tariffs exceeding 100% on both sides. Mr. Bessent expressed confidence that these high tariff levels are unsustainable for China’s export-driven economy, suggesting Beijing will eventually seek a deal. However, Chinese officials maintain that the U.S. should take the first step toward resolution, with foreign ministry spokesman Guo Jiakun calling for dialogue based on “equality, respect and mutual benefit.”
Mr. Bessent acknowledged the dual purpose of the tariff strategy: generating revenue while encouraging companies to bring manufacturing back to the United States. To facilitate this transition, the administration plans to implement policies allowing businesses to write off factory setup costs and measures to reduce energy expenses, creating “great certainty” through the upcoming tax bill.
Critics note that tariffs ultimately function as taxes paid by U.S. companies importing goods, not by foreign nations directly.
Despite potential economic disruptions, Mr. Bessent downplayed concerns about supply chain issues, suggesting that retailers have likely managed their inventory in anticipation of these policy changes.
Read more: Bessent: Tariff revenue will provide income tax relief
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