Seeds of Wisdom RV and Economics Updates Wednesday Afternoon 2-25-26
Good Afternoon Dinar Recaps,
Tariffs Instead of Income Tax? Trump Floats Radical Revenue Shift in SOTU
Proposal signals potential restructuring of U.S. taxation, trade policy, and global capital flows
Overview
During his State of the Union address, President Donald Trump stated that tariffs could eventually replace the federal income tax.
The remark immediately ignited debate across economic, political, and financial circles. While presented as a populist fiscal shift, the implications extend far beyond campaign rhetoric.
Replacing income tax with tariffs would fundamentally restructure how the United States funds its government — shifting the burden from domestic wage earners to imported goods and foreign producers.
This is not a minor policy tweak. It is a potential redefinition of America’s revenue model.
Key Developments
1. Tariffs as Primary Revenue Engine
Trump suggested that revenue collected from import duties could substitute for federal income taxes.
Strategic Implication:
The U.S. federal government collected over $2 trillion annually from individual income taxes in recent years. Tariffs historically generate only a fraction of that amount. To replace income tax entirely would require dramatically higher tariff rates or broad-based import levies.
Such a move would transform trade policy into fiscal policy.
2. Return to Pre-1913 Revenue Model
Before the ratification of the Sixteenth Amendment to the United States Constitution, the federal government relied heavily on tariffs and excise taxes.
Strategic Implication:
Reversing over a century of tax structure would require constitutional, legislative, and economic recalibration. It would also mark a symbolic shift toward economic nationalism reminiscent of late 19th-century trade frameworks.
The question becomes whether modern global supply chains can withstand a 19th-century revenue strategy.
3. Trade Policy Becomes Domestic Tax Policy
If tariffs replace income tax:
Imported goods become more expensive.
Domestic manufacturing gains protective advantage.
Consumers effectively pay tax through higher prices.
Trade partners likely retaliate.
Strategic Implication:
This reframes taxation as an externalized cost — shifting fiscal extraction from paychecks to consumption patterns.
However, the globalized nature of supply chains means cost increases would ripple through virtually every sector.
4. Global Market Reaction and Legal Hurdles
Implementing such a shift would require congressional approval and potentially new trade authority legislation. It would also invite World Trade Organization disputes and retaliatory tariffs from major trading partners.
Strategic Implication:
If enacted, the move could accelerate:
De-dollarization conversations
Bilateral trade blocs
Strategic “friendshoring”
Fragmentation of global trade norms
In essence, fiscal restructuring could catalyze geopolitical restructuring.
Why It Matters
This proposal intersects three high-stakes arenas:
Domestic Tax Policy
International Trade Architecture
Global Reserve Currency Stability
Income tax provides predictable revenue. Tariffs fluctuate with trade volume and economic cycles. Shifting to tariff dependency introduces volatility into federal budgeting.
Markets would need to reprice risk across equities, bonds, and commodities.
Why It Matters to Foreign Currency Holders
From a global reset perspective, several implications emerge:
Dollar Demand Dynamics: Tariffs can strengthen short-term dollar demand but weaken long-term trade relationships.
Inflationary Pressure: Higher import costs feed domestic inflation, impacting monetary policy.
Trade Bloc Acceleration: Countries may deepen regional trade arrangements to bypass U.S. tariff exposure.
If the United States reorients toward tariff-driven funding, global settlement patterns could shift accordingly.
Implications for the Global Reset
Pillar 1: Sovereign Revenue Sovereignty
Governments may reconsider domestic taxation models amid rising debt burdens.
Pillar 2: Trade as Strategic Weapon
Tariffs would no longer be negotiation tools — they would become structural fiscal instruments.
The deeper theme: economic policy is merging with geopolitical strategy.
Replacing income tax with tariffs would represent one of the most significant fiscal transformations in modern U.S. history.
Whether rhetorical or actionable, the statement signals a willingness to challenge entrenched economic frameworks.
This is not just campaign messaging — it is a signal flare in the broader debate over sovereignty, trade, and the architecture of global finance.
Seeds of Wisdom Team
Newshounds News™ Exclusive
Sources
Reuters — “Trump Proposes Expanding Tariffs in State of the Union Address”
U.S. Constitution Center — “The Sixteenth Amendment and the Federal Income Tax”
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BRICS at a Crossroads: What If Russia Returns to the U.S. Dollar?
Would Moscow’s pivot reshape the de-dollarization movement — or merely slow it down?
Overview
For years, the BRICS bloc has promoted local currency trade to reduce reliance on the U.S. dollar. After sweeping Western sanctions in 2022, Russia became one of the most aggressive advocates of de-dollarization.
Now, reports suggest Moscow may seek renewed access to the U.S. dollar system through a potential trade deal requiring approval from Donald Trump.
If true, the move would represent a strategic U-turn — and could significantly reshape the trajectory of BRICS’ monetary ambitions.
Key Developments
1. Russia’s De-Dollarization Drive Post-2022
After sanctions cut Russian banks from Western financial channels, Moscow accelerated trade settlement in:
Rubles
Yuan
Rupees
Dirhams
Reports indicate nearly 90% of trade with China and India shifted to local currencies.
Strategic Implication:
Russia’s push appeared ideological — but it may have been primarily sanctions-driven pragmatism. If dollar access returns, motivation for aggressive de-dollarization may weaken.
2. Potential U.S. Dollar Re-Entry
If Russia regains broader access to dollar settlement:
Cross-border energy sales could return to dollar pricing.
Russian banks could re-engage global clearing systems.
Pressure on alternative payment systems could ease.
Strategic Implication:
A Russian pivot back to the dollar would slow BRICS’ collective momentum toward alternative financial architecture.
It would not necessarily end de-dollarization — but it would blunt its urgency.
3. BRICS Is Bigger Than Russia
Even if Moscow recalibrates, other BRICS members maintain independent agendas:
China continues internationalizing the yuan for trade settlement.
India promotes rupee trade via special Vostro accounts.
Brazil and South Africa pursue diversified trade partnerships aligned with national interests.
Strategic Implication:
The de-dollarization effort would likely shift from coordinated acceleration to fragmented progression.
China, in particular, has long-term structural goals that extend beyond Russia’s immediate needs.
4. Narrative Shift: Ideology vs. Necessity
If Russia returns to dollar usage, it reinforces a powerful conclusion:
De-dollarization may have been less about dismantling dollar dominance — and more about surviving sanctions.
Strategic Implication:
Global markets could interpret the move as evidence that dollar liquidity remains indispensable during geopolitical stress.
That perception alone strengthens the greenback’s reserve status.
Why It Matters
This potential shift tests whether BRICS de-dollarization is:
A permanent structural realignment
orA tactical response to Western sanctions
If Russia re-enters the dollar system, it signals that financial access outweighs monetary sovereignty when economic pressure mounts.
Markets would likely interpret the move as:
Short-term bullish for the dollar
Moderately bearish for alternative settlement systems
A pause — not a reversal — of multipolar currency ambitions
Why It Matters to Foreign Currency Holders
For those watching global monetary restructuring:
A slowdown in de-dollarization may extend the dollar’s dominance cycle.
Yuan internationalization continues regardless.
Fragmentation of payment systems remains a long-term theme.
The global reset narrative does not disappear — it simply evolves at a slower pace.
Momentum shifts, but structural pressures persist.
Implications for the Global Reset
Pillar 1: Dollar Resilience Under Pressure
Even after sanctions and political weaponization, the dollar remains the system most nations ultimately seek access to.
Pillar 2: Multipolar Finance — Delayed, Not Denied
BRICS ambitions may slow, but structural drivers (debt burdens, sanctions risk, trade fragmentation) remain intact.
If Russia pivots back to the dollar, it reveals a key truth:
Access to liquidity still trumps ideology.
Conclusion
A Russian return to dollar settlement would not dismantle BRICS — but it would reshape expectations.
The alliance’s de-dollarization agenda would likely continue at a reduced pace, increasingly driven by China’s long-term strategy rather than Russia’s immediate necessity.
The bigger question becomes:
Is de-dollarization a revolution — or simply leverage in negotiation?
Seeds of Wisdom Team
Newshounds News™ Exclusive
Sources
Watcher Guru — “What Happens to BRICS If Russia Returns to the US Dollar?”
Reuters — “Russia Expands Local Currency Trade Amid Sanctions Pressure”
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