Trump says Americans will get $2,000 from tariffs, but experts warn these ‘dividends’ may cost you more than that

That proposal stalled in the Senate.

Even if a new “dividend” plan advanced, it would likely require legislation to reallocate tariff revenue, something Congress has never done before on this scale.

Even if a mechanism existed to send checks from tariff revenue, it might lead to bigger problems.

“Stimulus checks might fuel inflation — at a point where tariffs are already inflationary,” Wolfe Research chief economist Stephanie Roth told CNN in the summer. “This just risks making the problem worse (3).”

Read more: Are you richer than you think? Here are 5 clear signs you’re punching way above the average American’s wealth

While tariffs do bring in revenue, the costs rarely fall on foreign producers. Importers typically pass those costs along to retailers — and eventually to shoppers.

According to the Yale Budget Lab, the average effective tariff rate has climbed to 18%, the highest since 1934 (4). Companies facing new import costs have already raised prices on electronics, vehicles, clothing and food packaging.

Independent analysts estimate that households could pay hundreds of dollars more per year in higher prices under the current tariff regime, offsetting any potential one-time rebate.

A Peterson Institute for International Economics analysis of Trump’s earlier trade policies found that nearly all of the tariff burden was ultimately borne by U.S. consumers through higher retail prices (5).

Trump and Bessent have both suggested that tariff revenues could be used to reduce the national debt, which now stands above $38 trillion (6).

But even record-high tariff collections would make only a modest dent. At $195 billion through September, total tariff revenue represents less than 1% of federal debt.

Economists warn that depending on tariffs to fund direct payments or debt reduction will have serious side effects.

“Tariffs are a damaging and inefficient way to raise funds,” wrote economist and former Under Secretary of the U.S. Treasury for International Affairs Jay Shambaugh this week (7). “When you tax something, you get less of it: This is why nearly all forms of taxation produce some distortion or cause some inefficiency in the economy.”

For perspective, sending $2,000 to every American adult would cost roughly $500 billion — more than double all tariff revenue collected this year.

The talk of a “tariff dividend” highlights a bigger issue: who really wins and loses from trade policy.

Tariffs can protect certain domestic industries, like steel or auto manufacturing, but they also tend to raise costs across the supply chain. That affects consumer goods, small business inventories and even housing materials.

For everyday Americans, the best way to prepare for the ripple effects is to watch import-heavy categories — electronics, appliances and vehicles — and lock in big purchases early if new tariffs are expected to rise.

Households should also consider adjusting budgets for inflation drift: Even modest price increases on goods with imported components can quietly erode purchasing power over time.

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The U.S. Treasury (1); The Hill (2); CNN (3); Yale (4); Peterson Institute for International Economics (5); U.S. Senate (6); Brookings Institute (7)

This article originally appeared on Moneywise.com under the title: Trump says Americans will get $2,000 from tariffs, but experts warn these ‘dividends’ may cost you more than that

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