President Donald Trump has been firing back against criticism that his trade war policy is harming everyday Americans by promising that his administration would distribute the profits to the citizens.
Most recently, the White House has revealed that $2,000 is the most likely value of the so-called ‘tariff dividend,’ a stimulus check allegedly funded by trade war revenue.
Historically, however, it was the citizens themselves rather than foreign governments or corporations that ultimately paid tariff-related costs, meaning that the check size likely does not paint the entire picture.
Some insights into the money that will actually return to Americans’ pockets could be gleaned from Trump’s claim that the tariffs are on track to raise $600 billion in revenue for the U.S.
Here’s how much your tariff dividend is actually worth
Assuming that, as is usually the case during trade wars, most of this revenue was ultimately generated via cost-of-living increases, each of the estimated 341 million Americans has contributed approximately $1,760 to the Federal government.
Thus, should the ‘tariff dividend’ truly amount to $2,000 in 2026, it would mean that each American would actually receive $240. Still, it is worth noting that the figures are as uncertain as they are speculative.
Though it is possible that every American will receive the check, it appears just as plausible that only adults will see the dividend payment. Considering there are an estimated 71 million underage citizens, this would mean that every adult will have actually lost $222 on the trade war.
Similarly, when initially discussing the dividends, President Trump singled out middle and low-income households as beneficiaries – albeit without precisely defining these groups – potentially further skewing the overall balance.
Did U.S. Citizens really give the government $600 billion in tariffs?
Elsewhere, the numbers are further obscured by the numerous remaining unknowns. Along with the precise tariff revenue at any given time not being known, it is more than likely that the numerous undocumented migrants in the U.S. have contributed to the overall value, despite presumably not being intended to receive the check.
This would then increase the relative amount received by citizens.
Additionally, it is possible that, unlike in more standard trade war situations, some of the tariff costs were offloaded to external markets or have been absorbed on the corporate side.
Though it would be unusual for companies to increase prices within, for example, France to pay for American import duties, the U.S. has both the economic and military muscle to make such a decision possible.
Still, the actual amount received by Americans will likely be known only once the dividends are paid, while their actual relative value will be possible to calculate only once peer-reviewed revenue figures from relevant institutions are published.
Ultimately, it is worth remembering that even if the trade war has only led to losses in the short-term, the historical use of tariffs has been more geared toward nurturing domestic production. Therefore, the actual effects of President Trump’s policy – of the so-called ‘Trumponomics’ – will only be truly known in the mid and long-term.
Featured image via Shutterstock
Source: https://finbold.com/trump-promised-a-2000-tariff-dividend-heres-how-much-youre-really-getting/
