Don’t Believe the Hype About Tariff Rebate Checks | Invesloan.com

If you think you’re about to get another stimulus check in the mail from Uncle Sam, think again.

First, it was the “DOGE Dividend,” a cut of DOGE savings for taxpaying Americans that would purportedly be as high as $5,000.

Now, there’s talk about a rebate check paid for by tariff revenue. President Donald Trump has even fundraised off of it.

But while Trump has mentioned the idea a couple of times, he hasn’t firmly committed to it. And many in his own party are against it.

“It’ll never pass,” Republican Sen. Bernie Moreno of Ohio flatly told reporters in July, rejecting the idea. “We have a $37 trillion debt.”

How tariff rebate checks entered the discourse

The first time Trump mentioned the idea was in July, when a reporter asked if tariff revenue could be used to provide a rebate to Americans.

“We’re thinking about that actually,” Trump replied, saying that he’s “thinking about a little rebate” for Americans of “a certain income level.”

Republican Sen. Josh Hawley of Missouri, eager to capitalize on Trump’s comments, quickly introduced a bill that would send $600 tax rebate checks to lower-income Americans.

Trump later mentioned it again at an August cabinet meeting, saying in response to a reporter’s question that “there’s a possibility” of taking some of the tariff revenue and making a “dividend” for Americans.

Both times, Trump was merely responding open-mindedly to question. The president notably did not propose the idea himself — and he hasn’t spoken about it outside of these contexts.

“You just made a lot of news,” Trump told the reporter who first floated the idea to him in July.

Trump also indicated both times that he’d prefer to use tariff revenue to address the national debt.

“Primarily, we want to pay down debt,” Trump said in August.

It’s all a bit similar to what happened in December, when Trump said he’d “consider” raising the minimum wage after being asked about it by a reporter, or when he said DOGE checks were “under consideration.”

Ultimately, both of those ideas ended up fizzling.

Here’s how it could work

Trump’s tariffs, ever-changing as they are, have brought in billions additional revenue. The rebate check is simply one proposal for how to spend it.

According to US Treasury data, the federal government has collected over $100 billion from customs duties so far this year, and Secretary Scott Bessent said in August that the US could be on track to collect well over $500 billion per year.

Independent analyses somewhat corrobate that. The Committee for a Responsible Federal Budget projected that the federal government could bring in $40 billion to $50 billion in tariff revenue per month in the near future.

Hawley’s bill would use that money to provide checks of at least $600 for each individual and dependent child in a family. Thus, a family of four would receive at least $2,400.

The bill also allows for larger checks if the tariff revenue soars higher than current projections, which Hawley’s office had estimated to be around $150 billion.

Hawley’s bill is designed to primarily benefit lower-income Americans: the rebate would be phased out for joint filers making more than $150,000, a household head making more than $112,500, and an individual making more than $75,000.

“I mean, who better to benefit from that than working people who could use a break?” Hawley asked reporters at the Capitol in July.

At the very least, Hawley’s legislation does not suffer from the same math problem that beset the $5,000 DOGE checks, which were based on Elon Musk’s lofty and ultimately unrealistic expectation of $2 trillion in savings as the result of cost-cutting.

Hawley’s plan is modeled after the pandemic-era stimulus check programs. The second round of stimulus checks, which were also $600 per person, ultimately cost roughly $141 billion, according to Internal Revenue Service data.

Hawley said at the time that he had not spoken with Trump about the idea.

‘It’s the dumbest idea I’ve ever heard’

Ultimately, the tariff checks are likely to run into a political brick wall. Other GOP senators told BI that they would prefer to spend any tariff revenue elsewhere.

Sen. Rand Paul of Kentucky said the idea was “ridiculous” given the size of the national debt, which currently stands at more than $37 trillion.

“We’re gonna basically borrow money to send it to the American people? There is no rebate if there’s no money,” Paul said. “I mean, it’s the dumbest idea I’ve ever heard.”

“Well, when we have a surplus, I’d be all for it,” Sen. Ron Johnson of Wisconsin said of the tariff rebate checks. “But we’re $37 trillion in debt, running a deficit that’s about $2 trillion as far as the eye can see. I would oppose it.”

Sen. Cynthia Lummis of Wyoming told BI she’d also prefer to see any tariff revenue be used to pay down the debt — or to fund a strategic Bitcoin reserve.

“You can take at least a portion of those tariff revenues, hold them in reserve, and they would appreciate in value at a pace that far exceeds any other asset,” Lummis said. “I think rebating it is not as good an idea as either paying down the debt or saving it in a reserve. I think it’s kind of a lost opportunity.”

The idea has also been panned in GOP policy circles. Tad DeHaven, a policy analyst at the libertarian Cato Institute, wrote in August that the rebate plan would be another “government tax and redistribution scheme” that “Republicans used to bemoan.”

DeHaven pointed to the fact that American consumers and businesses generally carry the burden of tariffs — even as the rebate is directed only primarily toward lower-income Americans.

“It would be a handout, not a rebate,” he wrote.

For Hawley, a self-styled populist who recently introduced a bill to raise the federal minimum wage to $15 an hour, the proposal is another attempt to focus attention on the GOP’s working-class base.

“Why shouldn’t working people benefit from the president’s policies, is my question to my fellow Republicans,” Hawley said.

For now, he appears to be going it alone, telling reporters that he’s not aware of any GOP colleagues who also support the idea.

“I don’t know, good question,” Hawley said. “Let me know if you find somebody.”