Mohan Sinha
14 Nov 2025, 18:53 GMT+10
WASHINGTON, D.C.: Budget experts dismissed President Donald Trump's proposal to give Americans a US$2,000 "tariff dividend," calling it unrealistic and reminiscent of his administration's earlier, short-lived plan for DOGE dividend checks supposedly funded by budget cuts from billionaire Elon Musk's companies.
Trump floated the idea on Truth Social over the weekend, just days after Republicans suffered election losses in Virginia, New Jersey, and other states — setbacks widely attributed to voter frustration over high living costs under his administration.
Trump insists his tariffs protect U.S. industries, bring factories back home, raise federal revenue, and give him leverage abroad. He claimed the tariffs were generating so much money that "a dividend of at least $2,000 per person (not including high-income people!) will be paid to everyone."
"The numbers just don't check out," said Erica York, vice president of federal tax policy at the nonpartisan Tax Foundation. Few details are known, including who would qualify or whether children would be included.
Even Treasury Secretary Scott Bessent appeared caught off guard. On ABC's This Week, he said he hadn't discussed the plan with Trump and suggested it might instead come as tax cuts rather than direct checks.
Tariff revenues have indeed surged — $195 billion in the budget year ending Sept. 30, up 153 percent from $77 billion in 2024 — but they still account for less than 4 percent of federal income and barely dent the $1.8 trillion deficit.
John Ricco of Yale's Budget Lab estimated Trump's tariffs could generate $200 to $300 billion annually, while a $2,000 payment to all Americans would cost around $600 billion. "It's clear that the revenue wouldn't be enough," he said, adding that such payouts would require an act of Congress.
Trump's global import tariffs also face a major legal test. The Supreme Court last week questioned his administration's broad use of emergency powers to justify the duties, which bypassed Congress's constitutional authority to impose taxes.
If the justices strike down the tariffs, the government may have to refund money to importers instead of sending dividend checks to families. Though Trump could try to reinstate tariffs through other means, doing so would be slow and complicated.
Economists note that tariffs are ultimately paid by U.S. importers and passed on to consumers through higher prices. "The dividend plan misses the mark," York said. "If the goal is to help Americans, just get rid of the tariffs."
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