'Dividends to people, paying down debt': What Trump plans to do with tariff earnings

In a bold move, US President Donald Trump has floated the idea of using revenue from additional tariffs on the USA’s trading partners to distribute dividends among citizens from poor economic backgrounds.

Speaking to reporters before boarding Air Force One after a visit to his New Jersey golf club, Trump hinted at the possibility.

“There could be a distribution or a dividend to the people of our country, I would say for people that would be middle income people and lower income people, we could do a dividend,” he said.

‘Will pay down debt’

The president’s remarks come as part of his broader defence of an aggressive tariff regime, which he insists is designed to promote fairness in global trade and reduce America’s staggering national debt.

“We’re going to pay down debt. We have a lot of money coming in—much more money than the country’s ever seen,” Trump told reporters. “One of the things we’re going to be doing is reducing debt. We should’ve done this many years ago.”

Trump’s tariffs, which include rates as high as 50 per cent on imports from countries with which the US has trade deficits and a 10 per cent baseline tariff on nearly all others, mark the most significant trade realignment in modern US history.

Citing a 1977 law, the president declared the trade imbalance a national emergency, paving the way for these measures. Just hours before an August 1 negotiation deadline, Trump
signed an executive order imposing tariffs on 69 countries, with some of the steepest rates targeting Brazil (50 per cent), Syria (41 per cent), Switzerland (39 per cent), Canada (35 per cent), India (25 per cent), and Taiwan (20 per cent). In a rare exception, Pakistan saw its tariff rate reduced from 29 per cent to 19 per cent.

The president stressed that his approach is about fairness, not political leverage.

“I’m not looking for leverage, I’m looking for fairness. We want to see reciprocal wherever we can and as much as possible,” he said, adding that the tariffs could generate “hundreds of billions of dollars” for the US Treasury. Trump noted that he had begun a similar strategy during his first term with China but was derailed by the Covid-19 pandemic. “I did this during my first term with China. We didn’t get to the rest because Covid hit,” he explained.

How much US is earning from tariffs?

The financial impact of the tariffs is already evident. According to Treasury data, customs duties and certain excise taxes have
generated $152 billion through July, nearly double the $78 billion collected during the same period last fiscal year.

However, the tariffs come with significant risks. Economists warn that the increased costs are beginning to trickle down to consumers, with many companies signalling they will raise prices to offset the added burden.

Analysts also predict that the tariffs could hamper overall economic performance, potentially reducing traditional income tax revenue in the long term.

As Trump’s tariff policy unfolds, it remains a high-stakes gamble—one that could either bolster the US economy and deliver tangible benefits to Americans or strain consumers and global trade relationships.