President Donald Trump suggested Tuesday that Americans could soon receive direct cash payments funded by skyrocketing tariff revenues—a signal that his hardline trade strategy might evolve into an economic stimulus tool ahead of the 2026 midterms.
Has The U.S. Government Raised Revenue From Tariffs? Yes
The U.S. Treasury amassed a stunning $267.7 billion in tariff revenues during the second quarter alone—a 188.7% spike from the second quarter of 2024.
Add the first quarter's $96.97 billion haul, and total 2025 tariff revenues have already surged past $360 billion as of June, with still four months left uncounted.
Trump said the federal government will "probably" send Americans a portion of the tariff proceeds "over the next fairly short period of time," without offering details on eligibility or size of the payments.
The gesture could echo the stimulus checks of the pandemic era, albeit with different political messaging.
In April, Trump said the tariffs could be used to "completely" eliminate or "substantially" cut income taxes for Americans earning under $200,000.
More recently, the White House weighed using $10 billion in tariff revenue to bail out U.S. farmers facing inflation and Chinese trade retaliation—or to issue $2,000 rebate checks to Americans.
Could The Tariff Checks Backfire Economically?
Economists are divided over whether Trump's proposed rebate checks would help or hurt the economy.
Chris Motola, a financial analyst at National Business Capital, said that if delayed government reports on inflation and employment—paused due to a shutdown—show signs of weakness, the checks may not worsen inflation. But the boost to consumer spending could paradoxically make tariffs more burdensome in the long run.
"It could kind of be a weird feedback loop where the tariff stimulus justifies passing on more tariff costs," said Motola.
Paul Johnson, a value investing professor at Fordham’s Gabelli School of Business, compared the proposed checks to pandemic-era stimulus packages—but warned their impact would be diminished by recent inflation and stagnant wage growth. He doubts many recipients would spend the money freely.
"Consumers might not feel like it's free money," Johnson said, suggesting the payments could instead be funneled into savings or used to offset cost-of-living hikes.
How Does Tariff Redistribution Usually Work?
According to a paper from the Federal Reserve Bank of Cleveland, tariff revenues can actually lead to average welfare gains—but only under specific conditions.
When redistributed through lump-sum payments, especially to low-income households, tariffs can soften inequality and even boost economic activity, despite the presence of retaliatory measures.
However, the same study found that using tariff income to cut capital income taxes—often benefiting wealthier Americans—could worsen inequality and yield weaker economic gains than labor tax cuts or direct transfers.
The paper emphasizes that without redistribution, tariffs tend to harm everyone, with the most significant losses falling on lower-skilled workers and the poorest individuals.
Conclusion: Will Tariff Billions Go To Voters Or The Deficit?
As discussions continue around rebate checks, tax cuts and targeted bailouts, the ballooning tariff windfall is emerging as both a political weapon and a policy wildcard for the Trump administration.
Still, it remains unclear how far the White House will go in turning tariff revenue into direct cash handouts.
With the U.S. budget deficit projected to hit 7.4% of GDP—or over $2.2 trillion in 2025, according to the latest IMF estimates—pressure to prioritize deficit reduction could limit the scope of any rebate program.
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