TARRIFSAnalysis: Trump's Proposed Tariff Rebate Would Costs Twice as Much as Tariffs
President Donald Trump has again floated the idea of sending Americans $2,000 from tariff revenue, but a new analysis suggests the import taxes won’t bring in enough money to cover the checks. The $2,000 rebate would cost approximately $600 billion, which is about twice as much as tariffs are expected to generate this year.
President Donald Trump has again floated the idea of sending Americans $2,000 from tariff revenue, but a new analysis suggests the import taxes won’t bring in enough money to cover the checks.
Trump’s tariff rebate suggestion comes a week after the Supreme Court sharply questioned his authority to impose tariffs under a 1977 law that he has used to justify the bulk of the tariffs announced on April 2, which he dubbed “Liberation Day” for U.S. trade. The cases challenging Trump’s tariff authority remain pending before the nation’s highest court, but even if the revenue source were not in question, Trump could face challenges in getting the checks out to taxpayers.
Trump brought up the idea over the weekend and again on Monday.
“All money left over from the $2000 payments made to low and middle income USA Citizens, from the massive Tariff Income pouring into our Country from foreign countries, which will be substantial, will be used to SUBSTANTIALLY PAY DOWN NATIONAL DEBT,” Trump wrote in a social media post.
Trump provided no details, but the estimates are already underway.
The Committee for a Responsible Federal Budget is working on an analysis of this proposal, but has raised questions about Trump’s idea. The group stated that if the payments were structured like the COVID-19 stimulus payments, the $2,000 dividend would cost approximately $600 billion, which is about twice as much as tariffs are expected to generate this year.
“Current tariffs have raised about $100 billion so far, and will raise about $300 billion per year in the steady state,” CFRB noted. “If paid annually, dividends would be twice as expensive as tariffs.”
The group suggested that if the checks were be paid every other year starting at the end of next year, it might not raise costs, but would take longer.
“If the Supreme Court upholds the lower courts’ rulings against the tariffs, it would take seven years before the first dividend could be paid on a revenue neutral basis,” CFRB said.
CFRB also said that the nation’s $38 trillion in debt must be addressed.
“Under no circumstances is the government doing enough to pay down debt, despite the claims to the contrary,” it noted.
Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families and pay down the national debt. Economists, businesses and some public companies have warned that tariffs will raise prices on a wide range of consumer products.
