WASHINGTON – Financial markets are on edge as President Donald Trump prepares to unveil his latest round of tariffs on Wednesday, a move his administration claims will generate $6 trillion in revenue over the next decade.
Peter Navarro, Trump’s top trade adviser, confirmed on Sunday that tariffs will raise approximately $600 billion per year—a figure that, if accurate, would make it one of the largest tax increases in U.S. history.
“Tariffs are going to raise about $600 billion a year, about $6 trillion over a 10-year period,” Navarro told Fox News. He also defended the policy, claiming “the message is that tariffs are tax cuts.”
However, economic analysts and business leaders strongly dispute this claim, warning that tariffs function as a tax on consumers and businesses, driving up prices and reducing economic growth.
One of the Largest Tax Increases in U.S. History?
Navarro’s estimated $600 billion annual revenue boost from tariffs would amount to roughly 2% of U.S. GDP, pushing the federal tax burden above 19% of GDP—far higher than the historical average of 17.3% since 1975.
To put this in perspective, Democratic administrations—often accused of favoring tax hikes—have never attempted such a massive revenue-raising measure.
Critics argue that, despite the White House’s rhetoric, tariffs are not a “tax cut” but rather a direct cost imposed on businesses and consumers.
“In the real economic world, a tariff is a tax,” said one economist. “If you raise $600 billion more a year in revenue for the federal government, you are taking that amount away from individuals and businesses in the private economy.”
Markets Brace for Fallout
Global financial markets have already begun reacting with caution as investors assess the potential damage from Trump’s planned tariffs.
Many U.S. manufacturers and retailers have warned that increased import costs will be passed down to consumers, raising inflationary pressures at a time when interest rates remain high.
The automotive industry is expected to take a significant hit, with Navarro separately confirming that an additional $100 billion per year in tariffs would be levied on cars and trucks.
With no exemptions planned for any country, U.S. allies and major trade partners—including the United Kingdom, the European Union, and China—are weighing potential retaliatory measures, raising the risk of a global trade war.
What’s Next?
President Trump is expected to unveil the full details of his tariff package on Wednesday, with White House officials promising an aggressive stance against countries imposing higher taxes on U.S. exports.
However, with concerns mounting over economic growth, inflation, and trade retaliation, business leaders and lawmakers—both in the U.S. and abroad—are preparing for a high-stakes showdown over the future of global commerce.
