Donald Trump has articulated significant pledges regarding his tariff system. He has stated that it will contribute to reducing the national debt, and he also claims the plan is so exceptionally effective that it will yield returns—in a literal sense—for the citizens of America.
But the math doesn’t quite add up.
In his cabinet meeting Tuesday, President Trump told his team and the media: “We’re going to be giving back refunds out of the tariffs because we’ve taken in literally trillions of dollars, and we’re going to be giving a nice dividend to the people, in addition to reducing debt. As you know, I inherited a lot of debt, but it’s peanuts compared to the kind of numbers we’re talking about.”
TL;DR
- Donald Trump claims tariffs will reduce national debt and give citizens literal returns.
- Current tariff revenue is significantly lower than the trillions Trump claims, not covering debt interest.
- Economists' forecasts for tariff revenue have been reduced, with the CBO now projecting a $3 trillion deficit reduction.
- Distributing $2,000 dividends annually to citizens could cost $6 trillion, exceeding estimated tariff revenue.
“So we’re going to be making a dividend to the people and additionally we’re going to be able to reduce debt and as time goes by over the next two, three, four years, those numbers are going to go up.”
He then vaguely proposed that in the future, citizens of the United States wouldn't be obligated to remit income taxes: “I believe that at some point in the not too distant future, you won’t even have income tax to pay because the money we’re taking in is so great.”
Although tariffs are projected to contribute trillions to the U.S. Economy over an extended period, the policy, fully unveiled in April, hasn't yet yielded that amount of funds. According to U.S. Customs and Border Protection data, for The Fiscal Year 2025, updated as of August, the United States collected $195.9 billion in import taxes. Naturally, this figure only represents a portion of the income tariffs will produce as they become fully effective: In October, duties brought in an all-time monthly record of $31.4 billion, an increase from $29.7 billion in September.
Even so, the annual revenue generated remains well within the $300 billion to $400 billion range, which doesn't even represent a portion of the interest due on the United States' national debt. For Fiscal Year 2025, the interest on national debt came to $1.22 trillion, and just a few months into Fiscal Year 2026, has already incurred a cost of $104 billion for the government at a rate of 3.355%.
Furthermore, economists are also reducing their forecasts for the tariff plan's ultimate revenue. In late November, the nonpartisan Congressional Budget Office (CBO) stated: “In total, the tariff changes will reduce deficits by $3 trillion.” This represents a 13-figure reduction from estimates made only a matter of months prior, at which point the CBO indicated it anticipates “tariffs will reduce total deficits by $4 trillion altogether.”
The CBO explained: “Roughly two-thirds of the downward revisions result from adjustments to reflect new data. Modifications to tariffs, which on net lowered the effective tariff rate (although rates on certain products were higher in November than they were in August), also reduced the estimated effect on the deficit.”
Coins2Day reached out to the White House seeking an explanation regarding the context of the “trillions” in dollars that President Trump mentioned, and the reasoning behind his assertion that the national debt is “peanuts” in relation to tariff income.
The dividends question
Even though the current tariffs might affect the national debt less than initially anticipated, President Trump has also committed on several occasions to distributing profits to American citizens.
Trump’s own cabinet has attempted to pour cold water on the idea: “We will see,” Treasury Secretary Bessent said on Fox News’ Sunday Morning Futures in mid-November. “We need legislation for that.”
Bessent has also attempted to caveat the dividend as coming from tax breaks already announced by the Oval Office, as opposed to a new form of stimulus: “The $2,000 dividend could come in lots of forms, in lots of ways,” he told ABC’s This Week with George Stephanopoulos last month. “You know, it could be just the tax decreases that we are seeing on the president’s agenda. You know, no tax on tips, no tax on overtime, no tax on Social Security. Deductibility of auto loans. So, you know, those are substantial deductions that, you know, are being financed in the tax bill.”
However, Trump's remarks this week appear to indicate he does indeed plan to disburse those funds from the tariff war chest. Once more, it might prove difficult to reconcile the figures.
According to the Committee for a Responsible Federal Budget (CRFB), taking President Trump at his word that “at least” $2,000 will be paid per person (excluding high earners) would cost about $600 billion. “While the President did not specify the frequency with which dividends would be paid, nor the precise amount (he said “at least $2,000 a person”), we estimate that $2,000 dividends would increase deficits by $6 trillion over ten years, assuming dividends are paid annually,” the nonpartisan organization wrote. “This is roughly twice as much as President Trump’s tariffs are estimated to raise over the same time period.”
The White House was approached for remarks concerning its strategy for funding both the taxpayer dividend and reducing the national debt, considering its present tariff revenue forecasts.
