Don’t Let Tariffs Cancel Out Tax Cuts | The American Spectator

In football, nothing frustrates a coach more than watching his team score a touchdown, only to see it erased by a careless penalty. In Washington, the same thing can happen — a big win gets undone by a self-inflicted mistake. That is precisely the risk now facing the White House.

Earlier this year, Congress and the president worked together to pass permanent tax relief for American families and businesses. It was a major policy victory, one that should help drive growth and competitiveness for years to come. But broad tariffs now threaten to take points off the board by offsetting the very gains those tax cuts delivered. (RELATED: Trump Broke the Economic Consensus on Trade — and Won)

The “One Big Beautiful Bill” ensures that the average household will keep $2,100 more of its income next year. Small businesses will save $736 billion over the next decade. Lower rates mean more take-home pay for workers, more investment in local communities and more room for businesses to expand and create jobs, victories the White House is touting. (RELATED: Tariffs As the New Tax Base: A Laughable Idea)

Yet tariffs are cutting deeply into these benefits. A paper from the Tax Foundation shows the tariffs amount to an average tax increase on U.S. households of $1,304 in 2025 and $1,588 in 2026.

Or, seen another way, Howard Lutnick continues to insist that tariff revenues may bring in $700 billion per year. If it is conservatively estimated that 50 percent of these tariffs are paid for by the American consumer, then divided by 340 million Americans, this comes to $1,027 per person — or roughly $4,100 per family of four.

The president’s heart may be in the right place when it comes to trade, but the results of his tariff policies are clearly undercutting his promise to deliver a new economic Golden Age. While tariffs can be an effective tool to force trading partners to the negotiating table, they are also a double-edged sword. If applied too broadly or for too long, they risk undermining the very economic gains that tax cuts were designed to achieve. (RELATED: The Gimmicks in Trump’s Trade Deals)

There is also a constitutional dimension that must be considered. Article I, Section 8 gives Congress — not the president — the power to “lay and collect Taxes, Duties, Imposts and Excises.” James Madison warned in Federalist 51 that the separation of powers is “essential to the preservation of liberty” and that each branch “should have a will of its own.” The Founders designed our system so that changes to the tax code require the consent of the people’s elected representatives in Congress, not just the chief executive.

To be clear, Congress should not tie the administration hands in pursuing legitimate trade objectives. Targeted tariffs can and should be part of a broader negotiating strategy, particularly on countries like China that are hostile to our interests and our values. But broad, sustained tariffs that function as a general tax increase belong in the same category as other revenue measures: openly debated, voted up or down by the House and Senate, and subject to public scrutiny and accountability.

America’s long-term economic success — as well as the president’s legacy — depends not only on the passage of tax cuts, but on ensuring they are not accidentally eroded by other shortsighted policies. (RELATED: The ‘BBB’: Conservatism but With Caveats)

Republicans in Congress and the White House have shown they can work together to deliver major wins for the American people. They should do so again — this time to ensure tax cuts deliver their full benefit, free from the hidden costs of unnecessarily broad tariffs. Otherwise, like a penalty-prone football team, we risk snatching defeat from the jaws of victory.

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