Topline
Legislation introduced Monday by Sen. Josh Hawley, R-Mo., would provide tariff rebate checks of at least $600 to American families, after President Donald Trump signaled his administration would “consider” sending checks based on the billions his tariffs have collected, though the payout program would likely lead to increased inflation.
President Donald Trump signaled his administration would “consider” sending Americans rebate checks from the billions in revenue his tariffs have raised.
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Key Facts
Hawley’s bill proposes establishing a refundable tax credit for Americans using tariff revenue, which would send at least $600 to each eligible adult and dependent child this year, pending approval from Congress and Trump.
Trump last week said his administration was “thinking about a little rebate” from tariff revenue that would impact “people of a certain income level,” though he did not provide additional details.
A larger rebate check would be issued if tariff revenue exceeds projections, according to the bill, which reduces the rebate by 5%—lowering the $600 sum to about $570—for joint filers with an adjusted gross income above $150,000, a head of household with an income of over $112,500 or an individual whose income exceeds $75,000.
Hawley said in a statement his bill would “allow hard-working Americans to benefit from the wealth” collected by Trump’s tariffs.
Would Tariff Rebates Influence Inflation?
It’s likely the tariff rebate checks, amounting to payouts to millions of U.S. citizens, would lead to higher inflation. COVID-19 stimulus checks approved by Trump and then-President Joe Biden in 2020 and 2021, respectively, injected about $814 billion into the economy, contributing to inflation reaching a 41-year high of more than 9% by June 2022. The stimulus programs accounted for about a third of inflation that year, according to the Federal Reserve Bank of St. Louis.
How Much Will Trump’s Tariffs Collect In Revenue?
Trump’s wide-reaching levies on U.S. trade partners are projected to raise about $2.5 trillion over the next decade, according to the Tax Foundation, which noted the tariffs will raise the price of common goods and taxes for the average household by nearly $1,300 in 2025 and about $1,700 in 2026. Treasury Secretary Scott Bessent told Fox Business last week the U.S. has collected $100 billion in tariff revenue since Trump implemented his levies and projected revenue would reach $300 billion per year. Revenue from tariffs totaled roughly $27 billion in June, an increase of $4 billion from May, according to the Treasury Department.
Surprising Fact
This is not the first time Trump has proposed rebate checks in his second term. Trump said in February he was considering using 20% of the savings from the then-Elon Musk-run Department of Government Efficiency to issue rebate checks. A proposal at the time suggested households would receive $5,000 checks, based on Musk’s “best-case” target for DOGE to eliminate $2 trillion in spending, though estimates for the dividend check came to as low as $21.50. House Speaker Mike Johnson, R-La., threw cold water on the idea and argued the federal government should instead deal with the “giant deficit that we’re contending with.”
Tangent
Trump announced last month an investment account with $1,000 in funds for children born in the U.S. between Jan. 1, 2025 and Jan. 1, 2029, with all newborn children automatically enrolled in the program. Parents or account custodians could place up to an additional $5,000 in post-tax contributions annually into the account, which would invest in index funds. Some tax analysts argued the accounts are too restricted because they are tied to stock funds and not less risky options like bonds or cash. The accounts were approved under Trump’s “Big Beautiful Bill” earlier this month.
Further Reading
ForbesHere’s Everything We Know About DOGE Dividend Checks—And How They Could Contribute To InflationBy Derek Saul
