Trump imposes 10% tariffs on all countries and implements reciprocal tariffs on trading partners

The US president said the tariffs would return the country to the prosperity it had enjoyed in past centuries.

US President Donald Trump signed an executive order to establish reciprocal tariffs for trading partners and impose a 10% base tariff on all imports from all countries.

Trump said the reciprocal tariffs would be about half of the tariffs that trading partners impose on US imports. For example, China currently imposes a 67% tariff on US imports, so the US reciprocal tariff on Chinese goods would be 34%. In addition, Trump also announced a standard 25% tariff on all auto imports.

Trump told the media that these tariffs would return the United States to the economic prosperity of past centuries:

"From 1789 to 1913, we were a country supported by tariffs. During that period, the United States was the richest in history. How rich was it? In the 1880s, we even set up a committee to decide what to do with the large amount of money collected."

"Then, in 1913, for reasons that are beyond human comprehension, they established an income tax and began to make citizens pay taxes instead of foreign countries," Trump said.

Trump proposed tariffs through the lens of economic protectionism and hinted at replacing the income tax with tariffs, returning to 19th-century economic policies.

Trump proposes to abolish the federal income tax and replace it with tariff revenue

In October 2024, Trump proposed the idea of abolishing the Internal Revenue Service (IRS) during his campaign and proposed to fund the federal government through trade tariffs.

According to estimates by Dancing Numbers, an accounting automation company, Trump's plan could save each American taxpayer between $134,809 and $325,561 in taxes over their lifetime.

The higher range of the tax savings estimate would only be achieved if other wage-based taxes at the state and municipal levels were eliminated.

Howard Lutnick, the U.S. Commerce Secretary who took office in February, also expressed support for replacing the IRS with an "External Revenue Service."

Lutnick said the U.S. government cannot balance its budget while constantly asking citizens for more money every year. He also noted that tariffs would not only protect American workers but also strengthen the U.S. economy.