Economists call president's plan for tariff dividend 'a terrible idea'

Experts warn proposal could cost double the revenue from duties and stoke inflation.

- BY DANIEL FLATLEY

PRESIDENT TRUMP on Sunday announced a “dividend” tariff payment of “at least $2,000 a person.”

(CRAIG HUDSON Politico)

President Trump’s idea of mailing $2,000 “dividend” payments from tariffs to U.S. citizens marks a throwback to the stimulus checks distributed during the COVID-19 pandemic, with similar economic risks.

After floating the idea of tariff dividend payouts for months, Trump on Sunday offered the specific amount of “at least $2,000 a person.” He said the recipients wouldn't include high-income individuals, without specifying a threshold.

While the president has repeatedly touted the billions raised in tariff revenue this year, such a plan — which would probably require congressional approval — could cost the U.S. government double what it’s projected to take in for 2025, one estimate shows. It would also undercut Trump’s argument that such revenue will be used to help start paying down federal debt — a claim economists say is unlikely anytime soon, with the government running near-$2-trillion budget deficits.

Back in December 2020, Trump was pressing U.S. lawmakers to amp up pandemic-aid checks to $2,000 from the $600 that they went on to approve. His successor Joe Biden made up the $1,400 gap in his American Rescue Plan in March 2021.