Tariff Dividend Checks For Dummies (The People In Policy Debates) – OpEd
November 13, 2025
By Dean Baker
I learned basic arithmetic skills in third grade. I wasn’t exceptional; everyone in my public school third-grade class learned them. Of course, we all can now use computers to have calculations done for us in a fraction of a second. But still, somehow we have major national debates that show zero understanding of even the most basic arithmetic.
The latest example is the $2,000 tariff dividend check that Trump is promising us. The arithmetic here is about as simple as it gets. We have roughly 340 million people in the country. Let’s say 10 percent don’t get the check because they meet Trump’s category of “high-income.”
That leaves over 300 million people getting Trump’s $2,000 checks. That comes to more than $600 billion. Trump’s tariffs are raising around $270 billion. That means we will be paying out $330 billion more in Trump tariff dividend checks than he is raising in tariff revenue. That would add $270 billion to the deficit — this coming from the same guy who is making an obsession of paying down our national debt.
And just to be clear, we were already looking at a budget deficit for 2026 of $1.8 trillion. If we add $330 billion, the deficit for the fiscal year will be $2.1 trillion. To put this in simple language that even a reporter for a major national news outlet can understand, Trump is proposing to add $2.1 trillion to the debt in 2026; he is not paying it down.
I acknowledge not being a deficit hawk and am not terrified by a deficit of this size, which is roughly 7 percent of GDP. But I suspect most of the politicians in Washington are, and certainly anyone who thinks we need to be paying down the debt should be screaming bloody murder.
But watching the reaction in major media outlets, there seems almost no appreciation of the fact that Trump was floating what would ordinarily be considered a very large increase in the deficit. In fact, if Trump were to give this tariff dividend check every year over the next decade, it would add close to $4 trillion to the debt (counting interest payments), almost as much as the big tax cut Congress approved earlier this year.
It’s also worth comparing Trump’s tariff dividends to other items in the news. The government shutdown was in large part over the $35 billion in annual payments for enhanced subsidies for people buying insurance in Obamacare exchanges. Trump and Republicans in Congress claimed that we didn’t have the money to pay for these subsidies. Trump’s tariff dividend checks would cost more than 17 times as much as the enhanced insurance subsidies.
To make another comparison, Trump saved us around $6 billion a year by shutting down PEPFAR, the program that has saved tens of millions of lives by treating people in Africa for AIDS. This means that Trump’s tariff dividend checks will cost us 100 times as much as the AIDS program that he said we couldn’t afford.
And just to throw in one more comparison, the annual appropriation for public broadcasting was $550 million. Trump’s tariff dividend checks would cost more than 1,000 times as much as the government’s payments for public broadcasting.
People can differ in their views on how important it is to save lives in Africa or provide people here with healthcare. They may also differ in their assessments of how important deficits are. But it really would be good if media outlets could make knowledge of third grade arithmetic a job requirement for reporters who deal with budget issues. It should be their job to provide meaningful information to the public on the topic. Letting someone talk about $2,000 dividend checks, and also about paying down the debt, is a sick joke.\\
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy.
Trump proposes $2,000 payments to most Americans to highlight benefits of tariffs
US President Donald Trump has proposed issuing payments of at least $2,000 to all Americans, apart from those in high-income brackets, saying the move would highlight the benefits of his tariff policy.
The US leader has floated the idea of paying a “tariff dividend” to almost all Americans from revenue collected by his administration from the tariffs applied on leading global economies, in an effort to bolster public support amid uncertainty over whether the Supreme Court will limit his use of tariffs.
On Sunday, Trump wrote on social media: “People that are against Tariffs are fools!,” adding that the country is “taking in trillions of dollars and will soon begin paying down our enormous debt, $37 trillion.”
He also suggested that “a dividend of at least $2,000 a person (not including high-income people!) will be paid to everyone.” The amount is equal to about €1,729.
The administration has yet to provide further clarification on how the payments would be distributed.00:02
Following Trump’s post, Treasury Secretary Scott Bessent indicated in an interview on ABC News’ This Week that the administration was considering tax cuts, but also said he had not spoken to Trump about the proposed dividend.
“The $2,000 dividend could come in lots of forms, in lots of ways,” Bessent said, suggesting possibilities such as eliminating taxes on tips, overtime, Social Security or even instituting an auto loan interest deductible.
With roughly 340 million citizens in the US, and around 19% of them living in upper-income households according to the Pew Research Center, approximately four-fifths of Americans could qualify for the proposed dividend.
The scheme would cost the federal budget, which has yet to be signed into law, hundreds of billions of dollars in 2026.
The US Committee for a Responsible Federal Budget reported that customs duties collected in the 2025 fiscal year were about $195 billion or (€168,63bn), representing an increase of US$118 billion (€102bn), up by approximately 150% from the previous year.
The US budget is further strained by the cost of servicing the national debt, which stands at more than 122% of GDP, or $37.64 trillion (€32.5tr).
Trump’s announcement comes after a turbulent week for his tariff plans. Last week, the Supreme Court signalled doubts over his authority to impose reciprocal tariffs under emergency powers, following earlier rulings from lower courts that he had exceeded his authority.
Trump has said that overturning the tariffs would be a “disaster” for the country, noting that much of the revenue would be used to reduce the national debt.
Tariffs have become a central pillar of Trump’s foreign policy in his second term, with double-digit reciprocal tariffs imposed on most countries. He has justified the measures by declaring America’s longstanding trade deficits a national emergency.
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