Treasury Secretary Scott Bessent, however, is a bit more circumspect. Earlier in November, Bessent told Fox News Sunday that “we will see” about the possibility of issuing checks, acknowledging that Congress would, in fact, need to pass legislation in order for these payments to be issued.
“To call it a tariff dividend, I think, is elevating in a way that should not be elevated. It’s just simply a stimulus check using taxpayer money,” said Zandi.
Trump also has competing fiscal priorities for tariff revenue. According to the White House, the money generated by the tariffs could be used to reduce the deficit, pay for the One Big Beautiful Bill Act—the massive Republican tax and spending law approved over the summer—and, now, cover the cost of these payments. The nonpartisan Congressional Budget Office has estimated that the Republican law would cost around $3 trillion over the next decade. That figure could theoretically be offset by tariff revenue. But those dollars can’t also be used to subsidize dividend checks if their purpose is paying for the tax bill.
There is precedent for issuing these kinds of rebate checks. However, they are typically administered in a time of significant downturn, as with the stimulus payments that were distributed in the wake of the 2008 economic crisis and the coronavirus pandemic, cataclysmic events that hardly seem comparable to the present moment.
Trump’s proposed checks are, in some ways, reminiscent of the stimulus payments that were distributed during the pandemic to Americans earning under a certain income threshold, in 2020 and 2021.
John Ricco, associate director of policy analysis at the Yale Budget Lab, noted that the 2021 stimulus checks were only one of many deficit-financed programs implemented during the pandemic. Economic boosts to state and local governments, unemployment insurance, and small businesses injected billions of dollars into the economy at the time. Many Republicans blamed the stimulus checks included in President Joe Biden’s 2021 coronavirus response legislation for increasing inflation, though economists are divided on the precise role they played in cost increases, which spiked globally.
There are questions about the inflationary impact of distributing billions of dollars in stimulus payments into an economy with relatively low unemployment and an inflation rate currently hovering around 3 percent. If demand is boosted without an increase in supply, it’s a potential recipe for higher prices.
If the stimulus checks did spur inflation, it’s possible that the Federal Reserve would choose to hold interest rates steady rather than continue to cut them, potentially setting off another conflict with the White House. Trump has long complained about the Fed’s slowness to cut rates, personally targeting Chair Jerome Powell.
Then there’s the aforementioned issue of congressional approval; despite the Republican majority in Congress, some fiscal conservatives could be wary of approving new stimulus payments. Lincicome noted that, after years of bashing Democrats for the 2021 stimulus checks, this would be the “miniaturized sequel of the very stuff that Republicans were complaining about in 2022, 2023 through the 2024 election.”
Meanwhile, the Supreme Court is currently mulling whether Trump’s tariffs are even constitutional. During oral arguments earlier this month, conservative justices expressed skepticism that Trump had the authority to unilaterally impose these levies. If the court rules that the president acted illegally by using emergency powers to implement tariffs without congressional consent, the administration may have to reimburse the revenue generated to American importers.
“If their goal is to reduce the consumer harm from tariffs, then they should just consider not doing the tariffs right in the first place,” said Durante.
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