On November 9, 2025, President Trump proposed a new round of direct payments to all American taxpayers, similar to those made during the COVID era. This time, however, those wages were to be funded from tariff revenue, and the plan was for all eligible Americans to receive $2,000, though high earners would not be eligible, a plan that immediately drew comparisons to pandemic wages in 2020 and 2021.
Trump proposed $2,000 in payments funded by tariff revenue instead of deficit spending.
A family spending $30,000 on tariffed goods could face annual costs of more than $3,000.
Tariffs create supply-side inflation that the Fed cannot moderate through interest rates.
If you’re thinking about retiring or know someone who is, there are three quick questions that make many Americans realize they may retire sooner than expected. take 5 minutes to learn more here
The political appeal of such a move is quite obvious, since making a direct payment is easy for all Americans to understand. Better yet, a $2,000 check could immediately help middle- and lower-class households already facing rising costs across the board. However, the COVID stimulus was a response to a sudden economic collapse, and this proposal would come at a time when the economy is stronger and unemployment, while rising, is still low.
This $2,000 proposal is very similar to the scenario a few years ago where you would look at eligible taxpayers who might be eligible for the $2,000 payment. The exact amount would understandably vary by income and household size, while high earners, although it was not clear exactly who a big earner would be, would be excluded.
So far, everything seems comparable to the pandemic, but the big difference is how this program would have been funded, as the COVID stimulus was deficit-financed, which meant the national debt grew without a specific source of revenue to fund it. Alternatively, you would see this $2,000 payment being funded by import taxes collected on goods entering the US from countries like China, across Europe, and other trading partners.
As for the political side of this conversation, it’s simple, because the Trump Administration can argue that other countries are paying for American incentives through tariffs and turning trade policy directly into financial aid for working families. This would reframe the conversation about tariffs from a potential economic hindrance to a benefit.
Speaking of benefits, a $2,000 check will undoubtedly provide relief by helping pay off credit card debt, build savings, or fund a variety of spending options. If you’re a family living paycheck to paycheck, that money can’t come soon enough, and since it would appear as a direct payment, it would only appear in a day.
By all accounts, you can’t argue with the short-term benefits of such a stimulus for most Americans, as $2,000 injected into a household budget can go a long way. Families struggling to make their next mortgage payment could use this money to start getting out of debt. Better yet, consumer spending would likely increase as well, as some Americans would take that money to the mall, Target, and Walmart and spend it. Beneficiaries would also associate this check with the current administration that delivered it and almost immediately create a mental link that unites policies and personal benefits.
Of course, economists have questions, such as whether or not such a stimulus is needed. The economic justification was immediately clear during COVID, and that was to prevent the US economy from collapsing. The second question economists will ask is about funding and whether there is any fuzzy math involved because tariffs are simply not free money. These are costs imposed on importers and passed on to consumers at home, raising three fundamental flaws that must be addressed.
Let’s be completely transparent and recognize that tariffs increase prices, and that’s really not up for debate because it’s basic math. When the government imposes a 20% tariff on imported goods, the importers pay the tax and pass most, if not all, to consumers through higher prices. This means that price increases in US goods fund a $2,000 stimulus.
Worse, the math doesn’t really work in taxpayers’ favor either, as tariffs on consumer goods, electronics, clothing, etc., drive up prices throughout the economy. For example, a family spending $30,000 annually on goods subject to the tariff could experience a 10% increase, resulting in an increase in total costs of $3,000 in a year. Even with a $2,000 check, they are still a $1,000 net negative.
This net negative concern is especially true when you consider that stimulus control will arrive only once, and higher prices will remain in place as long as tariffs. The worry is that a one-time payment sounds great on paper, but in a few months, no one will remember anything because the money will have already been spent and the economy will continue to slow down.
It’s also important to understand that the tariffs themselves are inflationary, as higher import costs mean higher consumer prices in categories like food and electronics. What is notable is that it is not the kind of demand-driven inflation that the Fed can moderate through interest rates. Instead, it is supply-side inflation caused directly by policy that increases the price of a good regardless of the level of its demand.
In addition, injecting $2,000 per taxpayer into the economy will boost consumer spending at a time when the Fed is trying to cool demand to better regulate inflation. Adding more money to the market while chasing the same amount of goods will only push prices higher. Also worth considering is the Fed’s effort to reduce inflation by raising interest rates, all of which could be for naught if a trade stimulus package is introduced.
You also cannot ignore the fact that this combination is and will be toxic to the economy, because tariff-driven supply-side inflation will only drive up costs, while incentive-driven demand-side inflation will only drive up prices. This leaves the Fed with something of a choice between making an impossible choice to either abandon efforts to further reduce inflation or return to raising interest rates, likely triggering a US recession.
Unsurprisingly, tariffs disrupt supply chains, reduce overall trade and slow economic growth. Federal Reserve research, as detailed in recent analyses, confirms that tariff policies will reduce GDP growth by creating a lot of market uncertainty.
When businesses face uncertainty, they delay investment because supply chain managers can no longer commit to long-term contracts when trade policies change weekly. Slower growth almost means slower job creation, which in turn means lower wage increases and weaker corporate earnings. For American workers, you just end up with fewer opportunities for raises and promotions, while investors are stuck with lower returns.
The president’s proposed $2,000 stimulus check cannot make up for an economy that is growing more slowly because of the trade policies that funded it. If the tariffs end up reducing GDP growth by 0.5% annually, a conservative number based on Fed data, the long-term cost far outweighs the short-term benefit of a single payment.
Of course, don’t forget the retaliatory tariffs that America’s trading partners will impose back on us. This causes US farmers, producers and service providers to lose access to huge markets. But if exports fall? And this will lead to fewer American jobs, lower incomes, and any revenue that is generated by import tariffs will only come at the expense of lost export revenue, making it a lose-lose for the overall American economy.
You might think that retirement is all about picking the best stocks or ETFs, but you’d be wrong. Even large investments can be a liability in retirement. It’s a simple difference between accumulation and distribution, and it makes all the difference.
The good news? After answering three quick questions, many Americans overhaul their portfolios and discover they can retire earlier than was expected. If you are considering retirement or know someone who is, take 5 minutes to learn more here.
