President Trump’s expansion of tariffs in 2025 has drawn widespread criticism, highlighting its direct impact as a tax on U.S. businesses and capital.
The tariff policy threatens federal revenue balance, labor markets, and investor sentiments, affecting both traditional and crypto financial sectors.
In 2025, President Trump implemented expanded “reciprocal tariffs” targeting key US trading partners. The initiative has sparked widespread discourse among economists, branding it a tax on capital. According to the Congressional Research Service, these tariffs have significantly increased federal revenue beyond initial estimates.
Michael Gapen, Morgan Stanley’s Chief Economist, noted that tariffs serve as a tax on capital, influencing labor costs and profitability. Corporations are absorbing costs without passing them to consumers, reflecting changes in US trade policy and its broader impact.
“Tariffs have been a tax on capital, so far.” — Michael Gapen, Chief Economist, Morgan Stanley
$1.3 Trillion Revenue from Tariffs by 2028 Predicted
Corporate leaders and economists have raised concerns about these tariffs’ effects on business and economic growth. An article from Intereconomics outlines that the tariffs are expected to generate over $1.3 trillion in new revenue by 2028, potentially reshaping corporate strategies and market dynamics.
The shift to relying on tariffs for federal revenue could influence hiring trends and corporate profitability. While stock markets continue to rise, underlying sentiments reveal caution as businesses experience major indigestion due to trade policy shifts, according to insights from the Duke Fuqua School of Business.
Repeat of US-China Trade Tensions Raises Concerns
Historically, US-China trade tensions between 2018–2020, during earlier tariffs, sparked supply chain issues and adverse economic effects. The pattern appears to repeat, with risks of retaliation and market destabilization remaining a concern for stakeholders. A detailed Yale research analysis provides further insight into these implications.
Experts from Kanalcoin suggest these tariff policies could lead to slower economic growth and inflationary pressures. Historically, such macroeconomic policies have triggered risk-off moves in crypto markets, affecting BTC and ETH performance significantly.
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