Analysis released on Monday suggests that potential rebate checks proposed by Trump could end up costing twice as much as the revenue generated from import taxes.
The president is contemplating sending out checks of “at least $2,000” to Americans meeting specific income criteria, funded by tariffs paid by U.S. importers under his administration’s policies.
However, the size and scope of these proposed checks would likely far exceed the projected revenue from tariffs, according to the Committee for a Responsible Federal Budget (CRFB).
This bipartisan budget watchdog posits that if the Trump administration follows the payment guidelines used during COVID-19 relief, the rebate checks could cost around $600 billion.
By the end of the year, U.S. tariffs are estimated to bring in only $300 billion in federal revenue, with just $100 billion collected so far, as noted by the CRFB.
“With national debt nearing record levels and annual budget deficits hitting close to $2 trillion, it’s critical for policymakers to prioritize reducing the deficit rather than introducing cash dividends to taxpayers,” CRFB stated.
Trump insisted on Monday that the remaining tariff revenue from these rebate checks would be used to “reduce our debt.” He also argued that when assessing federal revenue from tariffs, the anticipated “trillions of dollars” in investments from major corporations should be considered.
Facing backlash over the economy, Trump and the Republican Party encountered a significant setback in last week’s elections, which were largely influenced by growing inflation concerns. Despite a promise to lower prices and having ousted the Biden administration in 2024, Trump is now grappling with similar economic pressures.
Notably, even though Trump claims to have tamed inflation, the annual inflation rate registered at 3% in September, which is the same rate as when he took office in January. While prices for certain items, like eggs and gasoline, have seen a decline under his administration, many others have increased, partly as a consequence of his tariffs.
In November, consumer sentiment dropped to near-record lows amid the federal government shutdown.
Initially downplaying affordability issues as a “shortcoming,” Trump later announced several initiatives aimed at addressing inflated prices, including the consideration of rebate checks.
On Friday, he revealed that he has instructed the Justice Department to look into the meat processing sector for potential antitrust violations and “beef price gouging,” which has surged by 15% over the past year.
