US President Donald Trump has made another bold claim about the benefits of his sweeping trade tariffs. He claims that the revenues generated from these tariffs could enable the federal government to lower income taxes for Americans earning less than $200,000 per year. So, have economists and voters been worrying needlessly about his economic agenda? Only time will tell.

In a recent statement, the US leader reiterated his previous assertion that tariff revenues would allow for substantial tax relief. "When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated. Focus will be on people making less than $200,000 a year," Trump said in his post on Truth Social.

President Trump's comments came just ahead of a new wave of steep tariffs on Chinese imports, which are set to take effect on Friday, May 2. However, even before their official implementation, these measures have already pushed up prices for American consumers. According to media reports and social media posts, popular Chinese e-commerce platforms Temu and Shein have sharply raised prices for US consumers.

According to Bloomberg, US import tariffs increased by more than 60% in April. Following the first round of Trump-era tariffs, the federal government collected $15.4 billion in customs duties. However, this figure represents only a fraction of what the federal government earns through income taxes. Preliminary estimates suggest that tariff revenue would need to grow substantially to substantiate Trump's claim that the duties could fund meaningful income tax cuts.

Data from the US Treasury Department shows the federal government has collected $2.26 trillion in tax revenue thus far in the current fiscal year. More than half of this revenue came from individual income taxes.

Earlier in April, Trump announced sweeping tariffs targeting America's key trading partners. Although he later postponed most of them, he raised tariffs on Chinese goods to 145%, which triggered a sharp escalation in the trade conflict between the world's two largest economies.