Market "Big Event": Trump clearly states the specific amount of "tariff refunds" for the first time, $2,000 per person reappears as "pandemic checks"?

Trump proposed the idea of distributing $2,000 to American citizens from tariff revenues, which not only evokes memories of the stimulus checks during the COVID-19 pandemic but may also bring similar economic risks.

On Monday, President Trump posted on his social media platform that the refunded tariff revenues will be distributed to American citizens as $2,000, and the remaining tariff revenues will be used to "significantly repay the national debt."

Wall Street Insight previously mentioned that on Sunday, November 9, Trump stated on social media that his tariff policy would provide "at least $2,000 in dividends for everyone," excluding high-income groups.

This proposal directly recalls the fiscal stimulus measures during the pandemic. In December 2020, Trump pressured U.S. lawmakers to increase the amount of pandemic relief checks from the approved $600 to $2,000.

Now, some economists believe that it was these excessive U.S. government expenditures that led to the most severe inflation in the U.S. between 2021 and 2022 since the early 1980s. More than four years later, the consumer price index has still not fully recovered to pre-pandemic levels.

Costly "Dividend" Plan

According to preliminary calculations by the centrist watchdog organization "Committee for a Responsible Federal Budget," if the "dividend" plan is designed based on the payment method during the pandemic, its total cost could reach $600 billion.

This figure far exceeds the U.S. government's capacity for tariff revenue. As of September, the total net tariff revenue for the U.S. was $195 billion, while many economists predict that tariff revenue for the calendar year 2025 will be about $300 billion.

Additionally, Trump has not specified how the $2,000 "dividend" will be implemented or whether he will seek legislative approval. Reportedly, National Economic Council Director Hassett stated that the plan does indeed require congressional approval.

Nobel laureate Paul Krugman believes this is a "terrible idea." He stated:

At a time when our government debt is increasing, taking a source of revenue to distribute money is an extremely irresponsible act.

On Monday, Trump stated that the "remaining" tariff revenues after the $2,000 payment would be used to "significantly repay the national debt." However, this claim faces practical difficulties.

Currently, the record tariff revenues in the U.S. are being used to limit the size of the fiscal deficit. To nominally reduce federal debt, a fiscal surplus is needed. The last time the U.S. had an annual surplus was over 20 years ago, while the current deficit is approaching $20 trillion, at a historical high.

Legal Challenges and Alternative Interpretations

The U.S. Supreme Court is reviewing the legality of Trump's imposition of import tariffs under the International Emergency Economic Powers Act (IEEPA).

The Committee for a Responsible Federal Budget stated in an email on Monday that if these tariffs are deemed invalid, it would take the government seven years to raise enough tariff revenue to pay for the "dividend checks." Customs and export control lawyer Lawrence Friedman pointed out:

If tariffs are illegally imposed, there should be corresponding remedies, but the authorities have not suggested that their remedy would be payments to individual American citizens.

At the same time, Treasury Secretary Basant proposed another possibility in a media interview.

He hinted that the "USD 2,000 dividend" could be reflected in the form of tax reductions. For example, "tips tax-free, overtime pay tax-free, social security tax-free, and car loan interest deductible," etc.

In other words, this may not be a cash expenditure. However, Basant also acknowledged that he had not communicated with Trump about this matter, indicating that the final form of the proposal remains full of uncertainty