Trump claims tariffs will solve $36 trillion national debt issue

President Donald Trump has announced a bold strategy to tackle the United States' national debt, which has now exceeded $36 trillion. 

In his recent remarks, he stated that tariffs would not only help manage this staggering debt but also “MAKE AMERICA WEALTHY AGAIN.” 

Trump compared his tariff approach to the economic boom experienced during the Second Industrial Revolution, asserting that tariffs, rather than income taxes, were the foundation of America’s greatest wealth. 

He proposed imposing tariffs on imports ranging from 10% to 20%, with even higher rates for Chinese goods, as a solution to the ongoing debt crisis.

As of January 2025, the national debt has surged by $4.7 trillion in just 18 months, rising from $31.5 trillion when the debt ceiling was suspended in June 2023.

The public debt currently sits at $28.7 trillion, and this rapid increase has serious implications for the U.S. economy.

Interest rates are climbing, and borrowing costs are escalating, with Treasury Secretary Janet Yellen warning that the government could reach its borrowing limit as soon as January 14.

If Congress does not act to raise or suspend this limit, a default could occur, potentially destabilising both domestic and global financial markets.

Critics of Trump’s tariff plan argue that it may lead to higher consumer prices and increased inflation. Economists estimate that a 10% tariff could add between 0.3 and 1.2 percentage points to inflation rates.

Additionally, Trump’s proposed tax cuts could add an estimated $7.75 trillion to the national debt over the next decade. 

Concerns about “twin deficits,” where both budget and trade deficits grow simultaneously, have been raised by economists who warn that these policies could weaken national savings and increase dependence on foreign capital.

With opposition from various economic experts—including sixteen Nobel Prize-winning economists—Trump's tariff strategy faces significant scrutiny regarding its potential effectiveness and risks of retaliation from other countries.