US President Trump says tariff revenue replacing income tax is an option

Newsquawk Staff · 21 Jan 2026, 03:38 UTC

US President Trump says tariff revenue replacing income tax is an option.

What it means

President Trump's suggestion that tariff revenue could replace income tax introduces a significant shift in fiscal policy discourse. This could lead to increased market volatility as stakeholders evaluate the implications for trade relations and currency values, particularly for the USD. If implemented, it could alter perceptions of trade policy and its impact on economic growth, potentially influencing risk sentiment across various asset classes.

What our latest note said

US Market Open, 6 Nov, 10:48 UTC · what it led with

APAC stocks were pressured; KOSPI slumped 6% following hefty losses in Samsung and SK Hynix.
USD is firmer against all G10 peers awaiting the US NFP report.

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Iranian President Pezeshkian says the Supreme Leader has granted the government some authority on dialogue, ISNA reports.
EUR/USD+0.1%
ECB policymakers see a December rate hike followed by a pause; New ECB staff estimates show the rise in bond yields cutting growth by a cumulative 100bps and inflation by 90bps in 2027-28 vs the September baseline, according to reports, citing sources.
EUR/USD−0.1%
ECB President Lagarde (Q&A) says policymakers believe they are in a good position to wait for incoming information. The situation they are in could have warranted a hike.
EUR/USD+0.1%

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