President Donald Trump has promised to give Americans $2,000 tariff rebate cheques next year, raising hopes for many people who are struggling financially.
Trump said on Monday to the media, “We’ve taken in hundreds of billions of dollars in tariff money. We’re going to be issuing dividends… probably the middle of next year, a little bit later than that, of thousands of dollars for individuals of moderate or middle income.”
But even though Trump talks as if these cheques are guaranteed, there are big challenges that could stop this from happening. Scott Lincicome, vice president of general economics at the Cato Institute, told CNN, “It’s highly unlikely there is some sort of stimulus check sent out next year. I would be pretty shocked.”
Here are three reasons why you won’t receive $2000 cheques:
Legal challenges
Congress is responsible for approving government spending under the Constitution.
However, a White House official said on Tuesday that the administration is exploring ways to issue tariff-dividend payments without needing Congress.
Taking this route would likely create controversy and could lead to legal battles. Even Deputy White House Chief of Staff James Blair admitted that the “most likely outcome is it requires an act of Congress.” Treasury Secretary Scott Bessent has also said the payments would need new legislation.
Scott Lincicome told CNN, “I find it extremely implausible that Republican budget hawks are just going to be okay with blowing another $300 billion to $600 billion.”
The national debt, which first passed $34 trillion in January 2024, has now grown to $38 trillion as of last month.
During Supreme Court oral arguments earlier this month, most justices were doubtful about Trump using emergency powers to impose global tariffs.
“If the Supreme Court says the bulk of the tariffs are illegal, that could throw a wrench in the tariff rebate plan,” said Erica York from the Tax Foundation to CNN.
IRS strains and uncertainty over tariff revenue
Estimates from the Tax Foundation project that Trump’s new tariffs will generate $158.4 billion in revenue in 2025 and $207.5 billion in 2026. But even with that large infusion of money, it may still fall short of what is needed to fund the “tariff dividend” payments the administration has floated, largely because no specific details about the program have been released yet.
According to CNN, the Tax Foundation modelled several possible versions of the proposed tariff dividend, and every scenario costs more than the tariffs bring in for 2025.
One model assumes payments only to tax filers and spouses, with a strict income cutoff at $100,000. Even then, the cost balloons to $279.8 billion, which is $121 billion more than the projected tariff revenue for the same year.
At the upper end, payments could extend to tax filers, non-filers, spouses, and dependents. That more expansive version would cost up to $606.8 billion, nearly double the combined revenue expected from the tariffs in 2025 and 2026.
This mismatch creates a major financing challenge, especially because the administration has promoted tariff revenue as a key offset for the sweeping tax and spending package Trump signed earlier this year. As Lincicome told CNN, “This is like the magic money tree. You just go to it anytime you need money. Of course, that’s not reality.”
The implementation of tariff dividend checks would fall on an IRS that is already stretched thin. The agency’s workforce has shrunk by more than 26,000 employees since Trump took office, a reduction of over 25%. Many senior roles remain unfilled, including the commissioner’s seat.
This comes at a time when the IRS is also trying to roll out the massive GOP tax-and-spending law enacted in July. The looming tax-filing season, starting in January, only adds pressure.
Electronic refunds could leave some taxpayers behind
The IRS has now moved entirely to electronic refund payments after a Trump executive order in March required federal agencies to stop using paper cheques.
But this shift could hurt lower-income taxpayers who don’t have bank accounts and previously depended on paper cheques, the same people who would benefit most from a $2,000 tariff dividend.
IRS and Treasury Department have not explained how they would send tariff dividend payments, and spokespeople did not respond to requests for comment.
In the past, IRS has said that people without bank accounts will still have options such as prepaid debit cards or digital wallets. The agency also plans to make limited exceptions to the no-paper-cheque rule.
Chuck Rettig, a shareholder at Chamberlain Hrdlicka who served as IRS commissioner in Trump’s first administration, told Bloomberg that the government successfully sent out hundreds of millions of pandemic-era stimulus payments electronically. He also noted that the IRS issues millions of earned income tax credit refunds to low-income taxpayers every year without major problems.
Economists warn payments could increase inflation
Some economists caution that sending tariff dividend cheques could make the affordability crisis worse. The concern is simple: while some people might use the money to pay off debt, many others would spend it. More spending increases demand for goods, and when demand rises faster than supply, prices go up.
During the last inflation spike, many Republicans blamed President Joe Biden’s 2021 stimulus checks for contributing to high prices. That could make it politically difficult for them to support similar stimulus payments under Trump.
According to CNN, research shows that those stimulus cheques did play a role in pushing inflation to its highest level in 40 years, although they were not the only cause. Huge amounts of other federal spending, including Trump’s 2020 stimulus checks and the Pay cheque Protection Program, also added to inflation.
As Stephen Moore, co-founder of Unleash Prosperity and former Trump economic adviser, told CNN, “Sending out cheques to people is a bad way to stimulate the economy. If there is tariff revenue, that should be used to cut income taxes across the board. Stimulus cheques only stimulate inflation.”
Bond market reaction could push borrowing costs higher
Using tariff revenue to fund dividend cheques could also upset investors known as “bond vigilantes”. If they lose confidence in the government’s financial discipline, they could drive up Treasury yields. Those yields affect many types of borrowing, including business loans and home mortgages, making them more expensive.
Ed Mills, a Washington policy analyst at Raymond James, told CNN, “What Congress and Trump are trying to do with stimulus, the bond market could take away instantly.”
This is one reason stimulus cheques are usually limited to true emergencies, such as the 2008 financial crisis or the 2020 pandemic.