The White House is arguing that revenue from President Trump's tariffs on U.S. importers is going to help pay for domestic tax cuts.

“This time around, tariffs will help pay for both tax cuts and deficit reduction,” Stephen Miran, chair of the White House Council of Economic Advisers (CEA), said Monday, distinguishing the incoming general tariffs from more targeted tariffs initiated in Trump’s first term.

“Lower taxes on Americans, financed in part by revenue provided from foreigners, will create economic growth,” he said.

But there is a lot more to this argument than simple addition and subtraction.

The tariffs’ inflationary effects could undercut savings for American households spurred by the tax cuts, undermining revenue gains from higher consumer spending.

Looked at another way, tax cuts for consumers could end up effectively subsidizing cost increases spurred by tariffs.

And Trump's tariffs —if they work as intended — could shrink their own tax base as businesses import fewer goods from abroad and Americans shift their spending away from higher-tax foreign goods.

On top of that, projected tariff revenues are just a fraction of the cuts Trump is seeking legislatively. Official government accounting separates revenue changes resulting from legislation from those resulting from executive actions, potentially making it difficult to get an official score.

Here’s a look at the interplay between higher tariffs and lower domestic taxes on consumers and U.S. businesses.

Trump's tax cuts will cost more than what tariffs will bring in

Trump has proposed roughly $600 billion annually in import taxes on foreign goods.

While there is great uncertainty about how much of Trump's proposal will stick, even the most optimistic estimates........

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