Former President Donald Trump has made several ambitious claims regarding the potential uses of revenue generated from sweeping tariffs imposed during his administration. While he envisions dividends for Americans and funding for various initiatives, experts note that he alone cannot dictate how these funds are allocated.
To pay for this, Trump’s promise specifies a dividend of at least $2,000 per person, and explicitly excludes high-income people. He hasn’t been specific about the income threshold for this new proposed universal payment. During a recent televised address, he emphasized that “a dividend of at least $2000 a person (not including high-income people!) will be paid to everyone.”
Tariffs and National Debt
Trump has previously claimed that the money collected from his tariffs will be used to pay down the national debt. Today, our national debt has reached almost $40 trillion. At one recent campaign event, he made his pledge clear. He promised over and over to apply 100% of tariff revenue to pay off the huge national debt.
Despite these claims, financial analysts indicate that even if all tariff revenue collected during his second term were dedicated to debt repayment, it would only account for less than 1% of the national debt. Trump acknowledged this reality in his discussions, asserting that “any loss of government revenue associated with many of the tax cuts his administration has either floated or enacted, will be made up for with tariff revenue.”
Support for Farmers and Child Care
There is no dispute Trump has promised to use some of the tariff money to aid farmers. These farmers have been the true victims of efforts to retaliate against countries like China. He promised to send “some of that tariff money” to help them get through the hard times. This promise is notably timely as farmers of all stripes are still dealing with the fallout from trade wars.
Additionally, Trump has suggested using tariff revenue to make child care more affordable, stating, “With child care … those numbers are small, relative to the kind of economic numbers that I’m talking about.” His proposals will do the most to help families deal with immediate fiscal pressures while mostly utilizing revenue raised through tariffs.
Trump used tariff money to increase direct cash payments to military service members. He declared that almost 1.5 million servicemen will get $1,776 checks. This appropriations situation stems from “the billions of dollars” that have been collected through the tariff revenue. This program was colloquially called the “Warrior Dividend,” underscoring the Administration’s shift in priorities towards supporting those who serve in our armed forces.
The Future of Tariff Revenue
As Trump continues to discuss the potential for tariff revenue to fund various initiatives, he remains optimistic about the economic impact. He even promises that in just a few years, Americans will no longer need to pay income taxes—period. This is plausible since tariffs will bring in plenty of revenue to pay for it. Trump stated, “I believe that at some point in the not‑too‑distant future, you won’t even have income tax to pay because the money we’re taking in is so great.”
Though these promises ring loud with his enthused adherents, whether he can actually deliver on these grandiose ideas isn’t clear. With the Supreme Court weeks away from issuing a decision in a historic tariff case, the stakes could not be higher. This decision may have a profound impact on the future disposition of tariff revenue.