President Trump keeps suggesting that tariffs can replace income taxes for most Americans. One big problem: The math doesn’t work. Wall Street Journal tax policy reporter Richard Rubin presents four big reasons to be skeptical of claims that tariffs will replace taxes.

Trump is expected to soften the impact of his auto tariffs, preventing duties on cars stacking on top of other levies, and easing some tariffs on foreign parts, the Journal reported late Monday. He is set to take action Tuesday, which marks 100 days since he took office.

Investors will also eye JOLTS data on job openings and labor turnover, plus a consumer-confidence indicator.

President Trump has teased the notion of linking his tariffs with major income-tax cuts, floating a huge change in how the government raises revenue and offering voters worried about tariffs a promise of future benefits.

“When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated,” he posted on Truth Social. “Focus will be on people making less than $200,000 a year.”

Trump’s statements point to a central riddle of his trade agenda—whether the point of higher tariffs is raising money or gaining leverage to strike better deals with trading partners, as some administration officials and congressional Republicans insist. But even if Trump left high tariffs in place, the revenue wouldn’t come close to the amount raised by income taxes for people making under $200,000.

• Trump to Soften Blow of Automotive Tariffs
• Video: Will Trump Tariffs Spur Recession? Four Economists Weigh In.

The Treasury Department raised its projection of borrowing in the current quarter to the higher end of the range strategists had forecasts. The Treasury estimated net marketable borrowing, the difference between the total amount to be borrowed and the amount of debt maturing, will be $514 billion for the three months from April through June. Treasury’s initial estimate, which it made public in February, was for $123 billion. (Barron’s)

• Mark Carney Wins Canada Election, Capping Dramatic Turnaround

Texas manufacturing business activity sank to its lowest level in almost five years, as price pressures again jumped, a reflection of the uncertainty prompted by a recent ramp-up in tariffs, according to a monthly survey of business executives. The Texas Manufacturing Outlook Survey's index for general business activity tumbled to minus 35.8 in April, from minus 16.3 in March, a third straight month of contraction and its lowest reading since May 2020, the Dallas Fed said. Price pressures accelerated in April, as the raw-materials prices index rose to its highest reading in around three years, it noted. Meanwhile, the survey's gauge of new orders plummeted, while its index of shipments fell into negative territory for the first time this year. (Dow Jones Newswires)

The Treasury Department raised its projection of borrowing in the current quarter to the higher end of the range strategists had forecasts. The Treasury estimated net marketable borrowing, the difference between the total amount to be borrowed and the amount of debt maturing, will be $514 billion for the three months from April through June. Treasury’s initial estimate, which it made public in February, was for $123 billion. (Barron's)

The San Francisco-based bank said the agency terminated a consent order issued in April 2018 for improperly charging some mortgage borrowers and for the way it ran an insurance program for auto loans. (Barron’s)

8:30 a.m.: U.S. Advance Economic Indicators Report
9 a.m.: U.S. Monthly House Price Index
9 a.m.: S&P CoreLogic Case-Shiller Indices
10 a.m.: U.S. Consumer Confidence Index
10 a.m.: U.S. Job Openings & Labor Turnover Survey
7 p.m.: World Bank Commodity Markets Outlook report

5 a.m.: EU Preliminary Flash Estimate GDP
7 a.m.: MBA Weekly Mortgage Applications Survey
8:15 a.m.: ADP National Employment Report
8:30 a.m.: U.S. Advance estimate GDP
9:45 a.m.: Chicago Business Barometer/ISM-Chicago Business Survey/Chicago PMI
10 a.m.: U.S. Pending Home Sales Index
10 a.m.: U.S. Personal Income and Outlays

Based on recent public comments, there are signs within the Federal Reserve’s policy-setting Federal Open Market Committee that two factions are emerging: one, backed by Fed Chair Jerome Powell, that seems more reluctant to cut interest rates until it is clear there is no great long-term inflation risk from tariffs, and another, championed by Fed governor Christopher Waller, more concerned about tariff growth implications and more eager to cut rates, strategist Ed Yardeni writes. Yardeni is inclined to favor the camp that sees inflation as the more pertinent concern. “So far, the data show that consumer spending and the labor market remain remarkably resilient,” he writes. “At the same time, inflationary pressures are mounting, according to regional and national business surveys.” Consumer inflation expectations are also rising, he adds.

 — Matt Grossman

• The global economy is set for a period of slower growth as trade and financial linkages fray, and closer cooperation between those countries that favor openness is needed to avoid worse outcomes, a senior official at the European Central Bank said Tuesday.
• Business sentiment in the euro area suffered this month as new tariffs darkened the economic outlook, according to a monthly survey published Tuesday.
• German consumer confidence surprisingly ticked up despite warnings of the economic hit from U.S. trade policy, as consumers pinned their hopes on the stability of a new incoming government.
• Ireland’s economy surged in the three months through March as U.S. pharmaceutical giants based in the country boosted production to build stockpiles back home ahead of threatened tariffs.
• The Spanish economy continued to expand at a rapid pace at the start of the year. Gross domestic product increased by 0.6% in the first three months of the year, according to figures set out Tuesday by Spain's statistics agency. (Dow Jones Newswires)
• Beijing is willing to support normal business cooperation with American firms, China’s commerce ministry said, coming days after Chinese airlines were ordered to stop taking delivery of Boeing aircraft.
• Russia’s top diplomat signaled Moscow wouldn’t accede to U.S. terms for an end to the war in Ukraine, as Russian President Vladimir Putin ordered a three-day cease-fire starting next month.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Hardika Singh in New York. Send your tips, suggestions and feedback to Hardika.Singh@wsj.com.