‎Trump's $2,000 'Tariff Dividend' Proposal Could Deepen U.S. Deficit, Budget Watchdog Warns

‎President Donald Trump’s recent proposal to distribute “at least $2,000 a person” to Americans from new tariff revenues—described as “tariff dividends”—is drawing sharp criticism from a federal budget watchdog that warns the plan would lose far more money than it generates.

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A budget watchdog warns Trump’s $2,000 “tariff dividend” plan could double deficits, costing $6 trillion more than tariff revenues generate.

‎Aaron Schwartz/Bloomberg via Getty Images

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‎Trump outlined the idea in a weekend post on Truth Social, saying that tariff revenue could be directly redistributed to citizens through annual payments, excluding high-income earners. The plan, which he suggested could also help reduce national debt, mirrors the structure of the COVID-19 Economic Impact Payments, according to an analysis by the nonpartisan Committee for a Responsible Federal Budget (CRFB).

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‎The fiscal math, however, points to a major shortfall. The CRFB estimates that a single round of $2,000 payments for all eligible Americans—including adults and children—would cost the federal government about $600 billion each year. By comparison, total tariff revenue to date amounts to roughly $100 billion and is projected to reach only about $300 billion annually in the future.

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‎Deficit Impact Could Be Substantial

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‎According to the CRFB, paying out annual “tariff dividends” would expand federal deficits by $6 trillion over the next decade—nearly double the revenue Trump’s tariffs are expected to raise during that same period. The report emphasizes that such payouts would not only consume all tariff income but would also intensify long-term fiscal pressures.

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‎To maintain a balanced approach, the CRFB calculated that “revenue neutral” dividend payments could only be issued every two years starting in 2027. If the Supreme Court upholds lower court rulings that some of Trump’s tariffs are unlawful, available revenue could shrink further, reducing the frequency of possible dividend payments to once every seven years.

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‎Rising Debt Projections Add to Concerns

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‎The watchdog also warned that diverting tariff funds to pay dividends would leave little room for using that revenue to address deficits or reduce national debt. Under current projections, directing all tariff proceeds to rebates could drive federal debt to 127% of Gross Domestic Product (GDP) by 2035, compared with 120% under existing law. If $2,000 payments were issued annually, the debt ratio could reach 134% over the same period.

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‎These projections arrive as the U.S. faces nearly $2 trillion in annual deficits and a national debt nearing record highs. Fiscal analysts say that managing spending and maintaining revenue sources remain critical to stabilizing the country’s financial outlook.

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‎Trump’s proposal takes inspiration from the pandemic-era Economic Impact Payments, which phased out for individuals earning above $75,000 and couples above $150,000. The CRFB noted that its cost analysis applied similar income thresholds, indicating that the fiscal impact could rise even higher without strict eligibility limits.