Trump Imposes 10% Tariff on All Imports, Announces Reciprocal Tariffs on Trade Partners
US President Donald Trump has signed an executive order imposing a 10% baseline tariff on all imports, along with reciprocal tariffs on trading partners. Under the new policy, the US will impose tariffs roughly half the rate that other countries apply to American goods. For example, if China levies a 67% tariff on US imports, the US will respond with a 34% tariff on Chinese products. Additionally, a flat 25% tariff will be applied to all automobile imports.
Trump argued that these tariffs would restore the economic prosperity the US experienced in past centuries, particularly during the period from 1789 to 1913. He stated, “From 1789 to 1913, we were a tariff-backed nation. The United States was proportionately the wealthiest it has ever been.” He further noted that in the 1880s, a commission was established to manage the vast wealth the country had accumulated.
Trump also criticized the introduction of the income tax in 1913, suggesting that it shifted the burden of taxation from foreign nations to American citizens. “Then, in 1913, for reasons unknown to mankind, they established the income tax so that citizens, rather than foreign countries, would start paying,” Trump said.
A Return to 19th-Century Economic Policies
Trump framed the tariffs as a way to revive 19th-century economic protectionism, even hinting that they could replace the income tax entirely. The idea of using tariffs to fund the federal government was first proposed by Trump during his 2024 campaign, suggesting the elimination of the Internal Revenue Service (IRS) in favor of a system funded by trade tariffs.
His plan, according to accounting firm Dancing Numbers, could save each American taxpayer between $134,809 and $325,561 in lifetime taxes, though the higher end of these savings would depend on the elimination of other state and municipal wage-based taxes.
Support from the Commerce Secretary
Commerce Secretary Howard Lutnick, who took office in February, voiced strong support for the tariff strategy, arguing that tariffs would not only help balance the federal budget but also protect American workers and bolster the US economy. He criticized the government’s continued demand for higher taxes while failing to balance the budget. Lutnick proposed replacing the IRS with what he called the ”External Revenue Service.”
This new approach to tariffs is part of Trump’s broader agenda to reshape the US economy by shifting the financial burden away from citizens and onto foreign trade partners. The proposal has sparked debates about the potential impacts on global trade and US economic relations.
Featured image from: euronews.com