President Donald Trumpsaid that revenue from tariffs could potentially eliminate the need for the federal income tax, citing the period from 1870 to 1913 when tariffs were the primary source of federal income and the nation experienced significant prosperity.

Record Revenue Meets Real-World Roadblocks

That claim to Fox News comes as U.S. customs duties surged to a historic high in April. The Treasury Department reported collecting a record $16.3 billion in customs duties—driven by steep new tariffs—marking the highest single-month total ever recorded.

April’s spike followed the rollout of Trump’s newly enacted tariffs, including a 25% steel tariff and a sweeping 10% universal tariff that went into effect on April 2.

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Still, the broader financial picture tells a different story. As of March, The Treasury has already reached the current debt limit of $36.1 trillion, according to the Congressional Budget Office. The federal deficit reached $1.31 trillion in the first half of fiscal 2025.

"If you get to $100 billion to $200 billion, you'll be pretty lucky," Moody's Chief Economist Mark Zandi told CNBC, offering a reality check and arguing that tariffs alone won't replace income tax burdens.

The auto sector is already feeling the squeeze. Reuters reviewed a memo sent by Ford Motor (NYSE:F) to dealers on May 7, which said that the company would raise prices by $2,000 on three models assembled in Mexico—the Mustang Mach-E, Maverick, and Bronco Sport—due to new tariffs. Ford is bracing for $2.5 billion in added costs and has suspended its 2025 financial guidance.

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General Motors (NYSE:GM) has disclosed a projected tariff exposure of $4 billion to $5 billion for 2025, prompting a downward revision of its annual earnings forecast and a pause on its $4 billion share-buyback program.

Beyond auto, the ripple effect stretches into food and beverage. In Pittsburgh, small businesses like Brew Gentlemen Brewery and Lotus Foods have reported delays, cost spikes, and logistical hurdles that some say echo COVID-era supply chain chaos, according to The Guardian.

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Internationally, the situation is escalating. The European Union is preparing a €100 billion ($113 billion) retaliation plan—including tariffs on Boeing aircraft—if U.S.-EU negotiations break down. The move follows the U.S.’s April 2 decision to impose a 20% tariff on nearly all EU exports, as the Financial Times reported.

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This article Trump Says Tariff Money Could 'Replace The Income Tax' — April Customs Collections Hit Record $15.4 Billion As New Duties Take Effect originally appeared on Benzinga.com

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