Donald Trump has made some big promises about his tariff regime. He said that this will help pay down the national debt, and that the plan has been so successful that it will bring real dividends to the American people.
But the math isn’t quite right.
At Tuesday’s cabinet meeting, President Trump tells his team And the media: “We’re going to give back the tariffs because we’ve literally gained trillions of dollars, and we’re going to provide a significant dividend to the people in addition to reducing the debt. As you know, I inherited a lot of debt, but it’s nothing compared to the numbers we’re talking about.”
“So we’re going to pay dividends to the people, plus we’re going to be able to reduce the debt and over time, over the next two, three, four years, those numbers are going to go up.”
He then vaguely hinted that in the future Americans won’t have to pay income taxes: “I believe at some point in the not-too-distant future you won’t even have to pay income taxes because we receive so much money.”
While tariffs do add trillions of dollars to the U.S. economy in the long run, the regime, fully announced in April, has yet to generate that level of cash. Every U.S. Customs and Border Protection dataIn fiscal 2025, which ended in August, the United States incurred $195.9 billion in tariffs. Of course, this only covers part of the revenue that will be generated once the tariffs take effect: Tariffs hit record monthly high of $31.4 billion in Octoberup from $29.7 billion in September.
Even so, the revenue generated is still between $300 and $400 billion per year, which is not even a fraction of the interest payments on the U.S. Treasury debt. For fiscal year 2025, interest payments National debt reaches $1.22 trilliona few months in fiscal year 2026 alone have cost the government $104 billion, a growth rate of 3.355%.
On top of that, economists have also scaled back their forecasts for the long-term impact of the tariff plan. In late November, the nonpartisan Congressional Budget Office (CBO) reported that “tariff adjustments would reduce the deficit by a total of $3 trillion.” That was a 13-digit reduction from forecasts just a few months agoThe Congressional Budget Office said it expects “tariffs to reduce the total deficit by $4 trillion.”
The Congressional Budget Office explained: “About two-thirds of the downward revisions were adjustments to reflect new data. The tariff revisions actually lowered effective tariff rates (although rates on some products were higher in November than in August) and also reduced the estimated impact on the deficit.”
wealth Contact the White House to clarify the context of President Trump’s reference to “trillions of dollars” and why he believes the national debt is “minuscule” compared to tariff revenue.
dividend issue
While the current tariffs may have less of an impact on the national debt than previously thought, President Trump has also repeatedly promised to pay dividends to U.S. citizens from the proceeds.
Trump’s own cabinet has tried Throw cold water on this idea: “We will see,” Finance Minister Bessant said. fox information’ Sunday morning futures Mid-November. “We need legislation for this.”
Bessent returns Trying to give up dividends From the Oval Office already announcing tax breaks, not new forms of stimulus: “A $2,000 dividend can come in many forms, many ways,” he told us ABC’s This week with George Stephanopouloslast month. “You know, this might just be the tax cuts that we see on the president’s agenda. You know, tips are not taxed, overtime is not taxed, Social Security is not taxed. Deductions for car loans. So, you know, those are substantial deductions that are, you know, funded in the tax bill.”
However, Trump’s comments this week seemed to indicate that he does intend to make these payments from tariff war funds. Again, it can be difficult to add up the numbers.
according to Committee for a Responsible Federal Budget (CRFB)If everyone (excluding high earners) pays “at least” $2,000, as President Trump has said, the cost would be about $600 billion. “While the president did not specify how often dividends would be paid, nor how much they would be (he said ‘at least $2,000 per person’), we estimate that a $2,000 dividend would increase the deficit by $6 trillion over 10 years, assuming dividends are paid annually,” the nonpartisan group wrote. “That’s roughly double President Trump’s projected tariff increases over the same period.”
We reached out to the White House for comment on how its current tariff revenue projections plan to pay dividends to taxpayers and pay down the national debt.