Trump Cabinet members: Tariff plans are working; tariffs could eliminate federal income tax for those earning less than $150,000

By Bethany Blankley
The Center Square

Members of President Donald Trump’s Cabinet argue that his tariff plans already are working, and over the long term will help reduce taxes on Americans.

“Reciprocal tariffs: how you treat us is how we will treat you,” is the baseline starting point for fair trade policies, Commerce Secretary Howard Lutnick said in a CBS News interview. European countries have a 20% value-added tax (VAT), which is why American cars aren’t sold there. “Try buying Chevrolet in Germany,” he said, when Americans can buy Mercedes, BMW and Volkswagen cars in the U.S. American cars can’t be purchased in Europe because “they blocked us through non-tariff trade barriers … they just keep us out,” he said.

Under Trump’s policy, companies that don’t want to pay American tariffs will have to manufacture their products in the U.S. to be sold here. The policy is already working, Lutnick said. TSMC is investing $100 billion in the U.S., Apple $500 billion, SoftBank $200 billion, Open AI, $500 billion.

“These companies are going to build in America … we are going to create trade craft,” he said, adding that the plan is to create five million jobs.

Lutnick also said critics of Trump's tariff plans are asking the wrong questions focusing on Canada when they should instead be asking, “Why are American cars being made in Canada instead of Detroit and Ohio?” The answer was bad policies implemented through the North American Free Trade Agreement, he said, which transferred American jobs out of the U.S. Trump is reversing this, he said.

“Once upon a time in America, … Americans made American cars in America,” Lutnick said. NAFTA enabled companies to “screw all the American workers to move [operations] to Mexico where there's cheap labor and … to Canada and [to] get out of our unions.” Under Trump, union labor will double because factories will come back and workers will have great jobs, he said. “We are going to have a different America, one that produces and manufactures.”

“Americans are going to see that American cars are going to be cheaper than foreign cars,” he added. “And the people who make those American cars are going to be American. These things are great for America. For once, I would like for people to talk about why it’s great to be an American. Finally, we have a president who cares about us and American workers.”

The goal of implementing reciprocal tariffs is also to eliminate the federal income tax for everyone earning less than $150,000 a year. “That’s his goal,” Lutnick said, referring to Trump. “That’s what I’m working for.”

“We are so used to paying taxes we have Stockholm Syndrome. How about no tax on tips, no tax on overtime, no tax on Social Security?” he asked.

Trump has proposed increased tariffs on multiple countries, including Canada, China, members of the European Union and Mexico. He’s also proposed eliminating federal income taxes on tips, overtime pay and Social Security payments.

While the stock market initially reacted negatively to Trump’s tariff plan, National Economic Council Director Kevin Hassett argues, “I think it will be great news for markets once they see the clarity about how reasonable it is to have reciprocal tariffs.”

“There are a heck of a lot of countries that play by the rules where we have big trade surpluses with the country,” he told MSNBC News Squawk Box, but “there are a few, just a few … where the trade deficits are huge. They're persistent. They last for years. They're doing things like sending autos into the U.S. but not letting our autos go to their countries and doing it in a way that harms American workers."

Citing U.S. Customs and Border Protection data related to revenue from goods coming into the country during the first week of March, Lutnick said, “If you run it out over 10 years, the amount of tariff revenue that we've already collected for the actions that we've taken, … adds up to about a trillion dollars over 10 years. A trillion dollars that we could use to … give everybody a tax cut or reduce the deficit.”

While critics view tariffs as tax hikes, believing the trillion dollars will disappear, he said, Trump's plan “is to use the tariff revenue to balance the budget and reduce taxes.”

Treasury Secretary Scott Bessent made similar arguments at the Economic Club of New York and in multiple media interviews.

Tariffs are designed to level the playing field, Bessent said, “such that the international trading system begins to reward ingenuity, security, rule of law, and stability, not wage suppression, currency manipulation, intellectual property theft, non-tariff barriers and draconian regulations. To the extent that another country's practices harm our own economy, and people in the United States will respond. This is the America First Trade Policy.

“We are identifying bad actors across a range of criteria, not just tariffs applied to our exports, but also non-tariff barriers, laws which unfairly apply fines to our exporters, government policies which undercut global competition and suppress wages and currency manipulation that enables persistent trade surpluses.”

Bessent said he's focused on implementing Trump’s domestic economic agenda, which includes deregulating the financial sector to accelerate the re-privatization of the economy; implementing reciprocal tariffs and economic policy that creates national security, including imposing sanctions on countries like Iran.

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