Trump floats using tariff revenue to send $2,000 checks to Americans. Here's how that could hurt them in the long run.

"Most Americans would probably welcome an unexpected $2,000 infusion to their bank accounts, courtesy of their federal government. It might, however, be too good to be true. President Donald Trump said Saturday in a Truth Social post that the government would use revenue from tariffs to send the cash to "everyone" except "high-income people." It's not the first time the president has floated this idea. He dangled the prospect of sending checks to Americans in fundraising emails over the summer."

"Like those pandemic checks, however, a new round of tariff dividend payments, while offering some short-term gain, could ultimately cause long-term pain for the average consumer. Giving consumers more cash to spend creates more demand for goods, which can lead to higher prices. The tariffs themselves can also lead to higher prices as businesses pass the higher cost of imports on to their customers."

A proposal would use tariff revenue to send $2,000 checks to most Americans while excluding high-income households. Such a one-time cash infusion would provide immediate relief to cash-strapped consumers but would increase overall demand. Tariffs raise import costs that businesses often pass to customers, adding further price pressure. Combined higher demand and higher input costs could push inflation upward, complicating the Federal Reserve's interest-rate plans and possibly prompting rate hikes. Potential rate increases and persistently higher consumer prices could erase the short-term benefits of the payments and raise long-term costs for households.

Read at Business Insider