Trump: Tariffs will replace income tax over time

Summary

President Trump asserted that tariffs will eventually replace the federal income tax, claiming executive authority despite a recent Supreme Court ruling striking down his previous tariff framework.Zhitong+ 3

Impact Analysis

Don’t get distracted by the ‘abolish income tax’ headline—that’s the populist hook. The real signal here is the timing: Trump is doubling down immediately after the Supreme Court struck down his IEEPA tariff framework earlier this week benzinga_article+ 2. He’s cornered legally but escalating politically, likely to force Congress’s hand or test new executive limits.

The macro setup is turning toxic. We just saw Q4 GDP miss expectations badly (1.4% vs 2.5%) Sina Finance, and now the administration is pushing a structural shift that guarantees inflation just as debt interest is reportedly overtaking defense spending . The math of replacing income tax with tariffs doesn’t work without crushing consumption, and the bond market knows it.

Bottom line: This is a recipe for stagflation. I’d be fading consumer discretionary—retailers can’t pass these proposed global rate hikes (10% to 15%) on forever benzinga_article—and looking at Gold or Crypto as the ultimate ‘policy error’ hedge.