Duty Bound: How Tariffs Could Reshape the Tax Landscape

Tariffs have long served as a tool for the United States to achieve revenue and policy objectives. However, President Trump has rapidly intensified their use in foreign policy during his second term. On February 1, 2025, the Trump administration announced a 25% tariff on imports from Canada and Mexico, a 10% tariff on all imports from China, and a 25% tariff on all steel and aluminum imports. Additionally, the administration has ordered an investigation on the use of tariffs to combat DSTs and other extraterritorial taxes, and has proposed reciprocal tariffs on a country-by-country basis.

In this episode, we delve into these tariffs and explore broader questions about presidential authority in imposing them. What powers does the president have to enact tariffs, and are these actions subject to any review process? What are the typical reasons for implementing tariffs, and what objectives has Trump outlined? Will a VAT lead to reciprocal tariffs?  How much revenue might these new tariffs generate, and how could they impact taxpayers and tax reform?

Join us as our hosts Gary Scanlon and Kristen Gamboa are joined by Luis Abad, a principal in the KPMG Washington National Tax - International Tax practice specializing in trade and customs, to explore these issues and more.