Trump Proposes Tariffs to Replace U.S. Income Tax

Former U.S. President Donald Trump proposes replacing income tax with tariffs, marking a potential shift in federal tax policy and global trade relations as of September 4, 2025.

This proposal could reshape economic policies, affecting trade, market stability, and possibly prompting capital flows into cryptocurrencies like Bitcoin and Ethereum amid policy uncertainty.

Trump Plan Sparks Economic and Legal Debates

Donald Trump suggested a new approach to tax policy, hinting at replacing income tax with substantial tariffs. This marks a potential shift in economic policy that could alter global trade dynamics. The proposal may result in international tensions, as well as domestic financial implications. The U.S. Secretary of Commerce Howard Lutnick supports the idea but acknowledges constraints in eliminating income tax universally. The Supreme Court will evaluate the legal standing of current tariffs, influencing future policy direction. Trump’s stance is supported by Commerce Secretary Lutnick, although Treasury Secretary Bessent outlined potential trade conflicts and backup plans involving Section 232 tariffs.

Economic commentators dissected the proposal, predicting impacts on trade relations and tax revenues. Analysts highlight projected shortfalls in replacing income tax with tariffs, estimating revenues would be insufficient to cover all federal tax receipts. Despite expected tariff challenges, the International Monetary Fund projected a negative growth impact on the U.S. in 2025 due to potential tariffs. Supreme Court’s upcoming ruling will be crucial in determining the policy’s future.

Donald J. Trump, Former U.S. President, 2024 Republican presidential candidate – “As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies… Show respect to America and our amazing Tech Companies or, consider the consequences!”

Crypto Market Adapts to Potential Tariff Shifts

Did you know? During previous U.S. tariff escalations from 2018 to 2020, global equity markets saw increased volatility. Investors shifted towards secure assets, leading to notable BTC and ETH price spikes during these trade tensions.

Bitcoin (BTC) is currently priced at $112,101.54, boasting a market cap of $2.23 trillion with a dominance of 57.67% in the crypto space. Over the past 24 hours, trading volume registered at $63.44 billion, reflecting a 17.02% decrease. The asset has seen a 1.13% increase in price in the past day. [Data: CoinMarketCap]

According to the Coincu research team, macro-economic policy shifts such as tariff changes often impact global financial markets significantly. Such shifts could lead cybercurrency users to seek decentralized assets, with BTC and ETH viewed as hedges against financial instability. Over time, such policies might increase demand for crypto assets, prompting regulatory debates and technological advancement discussions regarding their integration into mainstream economies.