Trump's Tariff "Dividend" Fantasy: A Nightmare for Liberty
Trump’s latest Truth Social rant is peak MAGA theater. He’s peddling a $2,000 “dividend” check for most Americans, funded by tariffs. Sounds like free money from the sky? It’s not. It’s a bureaucratic shell game that jacks up your costs, bloats the debt, and pretends government can outsmart markets.
As a tax wonk who’s spent years exposing government overreach, I’ll gut this nonsense line by line.
Trump’s Truth Social post, as quoted across the wires reads as follows:
“People that are against Tariffs are FOOLS! We are now the Richest, Most Respected Country In the World, With Almost No Inflation, and A Record Stock Market Price. 401k’s are Highest EVER. We are taking in Trillions of Dollars and will soon begin paying down our ENORMOUS DEBT, $37 Trillion. Record Investment in the USA, plants and factories going up all over the place. A dividend of at least $2000 a person (not including high income people!) will be paid to everyone”
Let’s carve it up:
1. “’People that are against Tariffs are FOOLS!’”
Fools? Not only are they not fools, but the consensus among leading economists is that tariffs are economically bad. Tariffs are taxes charged to American importers as merchandise comes into the U.S. Charging different tariffs on different products from different countries and constantly changing them prevents our companies from planning, and stifles economic stability. What’s more, the Supreme Court is deliberating to determine if the way Trump instituted them, with an emergency powers grab, is even constitutional. Furthermore, tariffs invite retaliation. Anti-tariff voices at Cato and many other organizations aren’t fools; they’re guarding against bureaucracy’s favorite tool: picking industries to “save” while you pay. Trump’s exemptions for agricultural imports? That’s cronyism, not strategy—propping food prices one day, “fixing” them the next.
2. “With Almost No Inflation...”
Flat-out fiction. Consumer prices are rising at approximately a 3% rate. It appears that Trump ignorantly thinks that because inflation came down from 9% under Biden to 3% currently, that is a price decline. In fact, prices are still rising 3% annually—significantly because of Trump’s tariffs. Importers pass costs to you—groceries up, shoes pricier. Tariffs are regressive taxes, hitting low earners hardest. Fiscal hawks know: Real anti-inflation? Shrink government, not global trade.
3. “We are taking in Trillions of Dollars….”
Trillions? Hyperbole alert! Truth: Tariffs hit $195 billion in 2025, a rounding error next to our $6 trillion federal budget. And not even 10% of the current annual deficit. Since it doesn’t even dent the current year’s deficit, it is truly nonsensical that there is a pool of money with which to pay dividends, and the “taking in” is from U.S. importers, not foreign governments. You foot the bill at Walmart. Want trillions? Cut the waste, not trade.
4. “401(k)’s accounts are the ‘Highest EVER.’”
Sure, markets are hot—blame AI and the tech boom, not tariffs. S&P’s up, but Trump’s “reciprocal” levies tanked stocks 5% in one day back in April, worst drop since COVID. Your 401(k) thrives on free markets, open borders for goods, not walls that hike input costs for U.S. firms. Tariffs protect cronies, not savers. What’s more, It appears that Trump doesn’t even believe his own rhetoric, because at the same time that he is bragging about a great economy, he is pushing Powell and the Fed to reduce interest rates, which is only done if you have significant concerns about the economy.
5. “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.”
Absolute garbage. Trump says the $2,000 is going to be paid out of excess tariff funds. I’ve described above that there are no excess tariff funds. And in fact, the tariff funds don’t even come close to eliminating the annual deficit. And if the $2,000 is paid anyway, since there are no available funds to pay it out of, it will just further increase the annual deficit. This will lead to additional inflation, like Biden’s giveaways did, and will increase debt for our children and grandchildren to pay back. Liberty means keeping your earnings, not waiting for Uncle Sam’s IOU.
Tariffs aren’t revenue magic—they’re taxes on you and me, the importer, the factory worker, the shopper. They crush trade, spark inflation, and hand bureaucrats more power to pick winners. Bottom line: This “dividend” is no win for workers or wallets. —tax you via tariffs, mail a fraction back, and call it a gift. True conservatism? Minimal taxes, balanced books, free enterprise. Ditch the handouts; let’s gut spending instead.