President Donald Trump expressed support for providing Americans with $2,000 in tariff dividend checks, though experts note that the source of funding for the plan remains unclear.
No Leftover Tariff Revenue
Erica York, Vice President of Federal Tax Policy at Tax Foundation, took to X on Monday to express her concerns about Trump’s proposal to send $2,000 tariff dividend checks.
She said that about 150 million Americans make less than $100,000. Therefore, sending out the checks would require $300 billion. York added that as the tariff revenue is projected to raise $217 billion annually, “There would be no leftover tariff revenue.”
In another post on the same day, York said the U.S. has yet to address its deficit problem, and distributing $2,000 checks to millions of Americans would only deepen the fiscal shortfall.
See Also: Trump Says GOP ‘Broke’ Chuck Schumer As Senate Approves Funding Bill To End Shutdown
York’s comments come in the wake of President Trump’s announcement that every American will receive at least $2,000 funded by U.S. tariff revenues. However, Treasury Secretary Scott Bessent clarified that the payout might come indirectly through tax cuts rather than direct checks. Bessent said the benefit could take forms such as eliminating taxes on tips, overtime, and Social Security, or allowing auto loan deductions under the president's tax plan.
Notably, U.S. tariff revenues soared to $267.7 billion in the second quarter—a 188.7% jump from a year earlier—bringing total collections for 2025 to over $360 billion by June end. However, the Supreme Court’s impending decision adds to the uncertainty.
Rebate Checks Could Worsen Deficit Woes
Trump’s proposal has been met with mixed reactions. While some see it as a potential economic boost, others, like Kevin O’Leary, have criticized it as a “quick band-aid” in a tough economy. He explained that while everyone loves the idea of a free check, especially in a tough economy, the reality is less appealing. According to him, sending out $2,000 checks funded by tariffs might feel good temporarily, but it does nothing to address the underlying issue.
Peter Schiff, an economist, also warned that the proposal would “defeat the very purpose of the tariffs” and lead to an increased trade deficit. Schiff wrote that consumers would likely use their extra income to purchase more expensive imports despite the tariffs, which, he concluded, would increase the trade deficit.
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