'Tariffs will replace income tax': Trump in key speech
What's the story
United States President Donald Trump has reiterated his belief that tariffs on foreign countries will eventually replace income tax. "As time goes by, I believe that tariffs, paid for by foreign countries, will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love," Trump said. In his State of the Union address, he said these tariffs are a major reason behind the US economic turnaround.
Trump
'These countries are now happy'
"I used these tariffs, took in hundreds of billions of dollars to make great deals for our country, both economically and on a national security basis. Everything was working well. Countries that were ripping us off for decades are now paying us hundreds of billions of dollars. They were ripping us so badly," he said. "These countries are now happy, and so are we," he added.
Legal dispute
Trump's response to Supreme Court ruling
Trump also slammed the US Supreme Court's decision to strike down his earlier import duties in front of four Supreme Court judges, including Chief Justice John Roberts, Coney Barrett, Brett Kavanaugh and Elena Kagan. He called it "very unfortunate," but added that most countries and corporations want to stick with existing deals. "The good news is that almost all countries and corporations want to keep the deal that they already made," he said.
Economic impact
Trump claims tariffs help settle wars
In his speech, Trump also claimed that the threat of tariffs helped him settle wars. He said alternative legal statutes would keep these deals in place without congressional action. "They're a little more complex, but they're actually probably better, leading to a solution that will be even stronger than before. Congressional action will not be necessary. It's already time-tested and approved," Trump added.
Trade policy
Controversial tariff strategy
Trump's tariff strategy has been controversial since he took office. In April 2025, he announced "reciprocal" taxes of up to 50% on imports from countries with trade deficits. This move was seen as a way to push for one-sided trade deals. The US Supreme Court recently ruled that President Trump did not have the legal authority to implement his sweeping tariffs, but he quickly responded by signing new tariffs under a different law.