Trump Imposes 10% Tariff on All Imports, 25% on Autos

United States President Donald Trump has signed an executive order implementing a 10% baseline tariff on all imports from every country. This move is part of a broader strategy to establish reciprocal tariffs on trading partners, which will be approximately half of what these partners charge for US imports. For instance, China currently imposes a 67% tariff on US imports, so the US will reciprocate with a 34% tariff on Chinese goods. Additionally, Trump announced a standard 25% tariff on all automobile imports.

Trump framed these tariffs as a means to restore the economic prosperity of the United States, drawing parallels to the economic policies of the 19th century. He highlighted that from 1789 to 1913, the US was a tariff-backed nation and was proportionately the wealthiest it has ever been. Trump suggested that the establishment of the income tax in 1913 shifted the financial burden from foreign countries to US citizens, which he believes has had a detrimental effect on the economy.

Trump's proposal to eliminate the federal income tax and replace it with tariff revenue is not new. He first floated this idea during his campaign in October 2024. According to an accounting automation company, this plan could save each American taxpayer between $134,809 and $325,561 in taxes over their lifetime. The higher range of this estimate assumes the elimination of other wage-based taxes at the state and municipal levels.

Commerce Secretary Howard Lutnick, who took office in February, has expressed support for this plan, suggesting that tariffs will protect American workers and strengthen the US economy. Lutnick argued that the US government cannot balance its budget yet consistently demands more from its citizens every year. He proposed replacing the Internal Revenue Service (IRS) with an "External Revenue Service" to fund the federal government exclusively through trade tariffs.