U.S. President Donald Trump has committed to providing $2,000 checks to Americans using the money that went into the Treasury from Trump’s tariffs.
On Wednesday, White House press secretary Caroline Levitt told reporters that Trump’s staff is exploring ways to make the plan a reality.
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The president proposed the idea on his Truth social media platform Sunday, five days after Republicans lost elections in states such as Virginia and New Jersey, largely due to voter dissatisfaction with the president’s economic management, particularly the high cost of living.
A new AP-NORC poll found that 67 percent of Americans disapprove of President Trump’s economic policies, while 33 percent approve.
The president posted that the tariffs are bringing in a lot of money, and that “everyone will receive a dividend of at least $2,000 per person (not including high-income earners!).”
“President Trump joined his favorite policy-making forum, Truth Social, to further assure Americans that they will receive a check from the revenue raised through tariffs,” Alex Jacks, who served on the National Economic Council under former US President Joe Biden, said in a statement provided to Al Jazeera.
“What’s interesting is that President Trump’s claims, which he’s been making on Truth Social for months, don’t match what his lawyers are making in court. He seems to be trying to pressure the justices by suggesting that if they rule against the tariffs, this will be a massive economic disaster.”
Budget experts have scoffed at President Trump’s tariff dividend plan, which is reminiscent of the Trump administration’s short-lived plan for Department of Government Efficiency (DOGE) dividend checks funded by billionaire Elon Musk’s federal budget cuts.
“The numbers are just not accurate,” Erica York, vice president for federal tax policy at the nonpartisan Tax Foundation, told The Associated Press.
Few details are known, including what the income limits will be and whether the payments will go to children.
Even President Trump’s Treasury Secretary Scott Bessent sounded a little blindsided by the bold dividend plan.
Appearing on ABC News’ “This Week” on Sunday, Bessent said he had not discussed the dividend with the president and suggested it might not mean Americans would receive a check from the government. Instead, rebates could take the form of tax breaks, Bessent said.
Tariffs do raise money, totaling $195 billion in the budget year ending Sept. 30, a 153% increase from $77 billion in fiscal year 2024. However, it still accounts for less than 4% of federal revenue and has done little to reduce the federal budget deficit, which is expected to reach a staggering $1.8 trillion in fiscal year 2025.
Budget enthusiasts claim Trump’s dividend calculations don’t work.
John Rico, an analyst at the Yale Institute for Budget Studies, estimates that President Trump’s tariffs will bring in between $200 billion and $300 billion a year. But if the $2,000 dividend were distributed to all Americans, including children, it would cost $600 billion. “It’s clear that the revenue coming in is not enough,” Rico said.
The analyst also noted that President Trump cannot pay dividends on his own. That would require legislation from Congress.
legal challenge
Moreover, the centerpiece of President Trump’s protectionist trade policy, double-digit taxes on imports from nearly every country in the world, may not survive a legal challenge that has reached the U.S. Supreme Court.
In a hearing last week, the justices expressed skepticism about the Trump administration’s claim that it has broad powers to declare national emergencies to justify tariffs. President Trump circumvented Congress, which has the power under the U.S. Constitution to impose taxes, including tariffs.
If a court cancels the tariffs, the Trump administration could refund the importers who paid them, rather than sending dividend checks to American households. Even if he loses at the Supreme Court, President Trump could find other ways to impose tariffs, but that could be cumbersome and time-consuming.
Mainstream economists and budget analysts point out that tariffs are paid by U.S. importers, who typically try to pass those costs on to customers through higher prices.
The Tax Foundation’s York said the dividend plan “misses the mark.” “If the goal is to help the American people, just eliminate tariffs.”
