Few outside of President Trump’s staunchest allies are lining up to support his idea for a tariff dividend in the form of $2,000 checks.
Economists have panned Trump’s logic and pointed out that the proposal would cost hundreds of billions of dollars more than tariffs are projected to bring in annually.
And GOP lawmakers are treading carefully after Republicans passed the budget-busting One Big Beautiful Bill earlier this year, with many wary of adding another wave of red ink.
But even as the hurdles are high, Trump’s record of getting his pet ideas enacted is leading few to dismiss the talk entirely.
After all, it was Trump who signed the first COVID-era stimulus checks into law (and reveled in the fact that they had his name affixed to them). More recently, his 2024 campaign trail ideas like no taxes on tips and overtime were seen as fantastical at the time but are now the law of the land.
Another factor suggesting that a real push could be in the offing is Trump and his party’s ongoing challenges around affordability issues, with the president often mentioning checks as an effort that he is undertaking in part to improve Americans’ views of his economy.
President Donald Trump is seen at the South Lawn of the White House for the arrival of Crown Prince of Saudi Arabia Mohammed bin Salman in Washington on November 18. (SAUL LOEB/AFP via Getty Images) ·SAUL LOEB via Getty Images
Terry Haines, the founder of Pangaea Policy, even called rebate checks “very likely” this week in a note to clients. He pointed out that the idea could be included in an upcoming reconciliation bill on Capitol Hill, which can be passed with only Republican votes.
“Trump keeps talking about it with increasing specificity, and Trump and congressional Rs have the legislative means to get it done, so markets today should consider it real,” he wrote.
Others are more skeptical. One way this issue could ultimately play out instead: a renewed focus on previous and possibly new tax cuts instead of checks.
This idea has notably been mentioned by Treasury Secretary Scott Bessent, even as Trump has gotten more and more detailed about dividend checks, even laying out a timeline this week.
“We’re going to be issuing dividends later on, probably in the middle of next year or a little bit later, of thousands of dollars for individuals of moderate and middle income,” he told reporters in the Oval Office on Monday, adding that on top of that, “We’re going to pay down debt.”
Trump’s pitch is one that economists have found plenty of reasons to object to.
Simple math alone shows that total tariff revenue for the recently finished fiscal year is an impressive $195 billion. But the rest of the government ran a deficit of about 10 times that.
Tariff revenue could grow in the year ahead, but it has virtually no chance of closing the annual deficit — much less Trump’s promise of paying down debt.
And the dividend idea would wipe out tariff revenues entirely for now.
A demonstrator holds up a sign outside the US Supreme Court in Washingtonduring recent arguments on whether a wide swath of Donald Trump’s tariffs are lawful. (MANDEL NGAN/AFP via Getty Images) ·MANDEL NGAN via Getty Images
The math has unified many economists and budget hawks in opposition to Trump’s plan, in addition to the fact that checks could also put upward pressure on inflation.
Scott Lincicome, an economist at the Cato Institute, offered recently that the dividend proposal “fails on mathematical, economic, and legal grounds.”
In an interview with Yahoo Finance, Lincicome added that it’s “really unlikely politically” this idea gets enacted as is, noting that Republicans concerned about the state of the budget are more likely to object after they “winked at the creative math that Republicans used to get [the One Big Beautiful Bill] across the finish line.”
Another reason the idea could find detractors is that Republicans have spent years charging that stimulus checks enacted by President Biden in the 2021 American Rescue Plan were a root cause of the sky-high inflation seen during the remainder of Biden’s term.
The dynamic has led some to suggest that Republican lawmakers will seek to avoid a politically volatile round of stimulus checks and instead focus on highlighting previous tax cuts or perhaps enacting new ones.
One proponent of this view is none other than Treasury Secretary Bessent, who recently said on ABC’s This Week, “[The] dividend could come in lots of forms, in lots of ways. It could be just the tax decreases that we are seeing on the president’s agenda,” as he mentioned previously enacted cuts like no tax on tips and no tax on overtime.
Treasury Secretary Scott Bessent speaks to reporters outside the White House onNovember 5. (SAUL LOEB/AFP via Getty Images) ·SAUL LOEB via Getty Images
Linicome added in this week’s interview that this formulation — a tax cut instead of a check — is certainly more possible noting that enacting new cuts could be an easier political lift as it’s “easier on substance because … Republicans like tax cuts, they like people to be able to keep their own money.”
But at the end of the day, the effect is the same, he added, noting, “A tax credit is a check, it’s just in a different form.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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