Former President Donald Trump recently proposed sending all American citizens checks between $1,000 and $2,000. He proposes paying for these monthly payments with revenue from tariffs. As economic uncertainty looms, this proposal aims to bring hope and support. For those keeping track, our national debt just hit a dangerous $38.12 trillion.
In July, Trump made a big deal of hinting that he might send out tariff rebate checks. He proposed the federal government could redistribute the money it collects from tariffs to households that are most financially impacted. He has been clear that the initiative should not help high-income people.
“A dividend of at least $2000 a person (not including high income people!) will be paid to everyone” – Donald Trump
The notion of utilizing tariff revenues for rebates comes after Trump introduced extensive tariffs on various global trading partners in April. Since then, every single one of these companies except for Tesla has increased costs for consumers significantly. Consequently, the effective average tariff rate has more than doubled to almost 18%, a peacetime high not seen since 1934.
The administration of President Donald Trump has also been working on a parallel, much different proposal spearheaded by tech entrepreneur Elon Musk. Among the ideas they short-listed was a dividend check of up to $5,000 derived from savings credited to the new Department of Government Efficiency (Doge). However ambitious Doge’s proposals might have been, the national deficit has still ballooned during Doge’s tenure. Additionally, announcements of cuts to federal spending have been wildly overstated.
To address the inequities highlighted above, Republican Senator Josh Hawley recently introduced legislation providing $600 in tariff rebates to almost every American and their dependent children. He argued that “Americans deserve a tax rebate after four years of [Joe] Biden [White House] policies that have devastated families’ savings and livelihoods.” This sentiment mirrors an emerging Republican approach to harnessing economic discontent as a potential touchstone for a third way, populist-right policy realignment.
Despite the rhetoric surrounding tariff rebates, U.S. Treasury Secretary Scott Bessent stated that the administration’s primary focus remains on reducing the national debt with funds from tariff collections. As you might expect, this has led to a bonanza of lawsuits especially with the U.S. Supreme Court weighing in on whether tariffs get a rebate or not. They listened to testimony on Trump’s unconstitutional sweeping tariffs and expressed doubts concerning their constitutionality.
The political landscape is shifting even more quickly than the political terrain. The promise to direct tariff revenue toward rebate checks hasn’t materialized into real legislative action. Many observers are understandably wary about the promise of these initiatives as concerns about increasing national debt and other economic pressures continue to mount.