President Donald Trump said Wednesday his administration is starting to send checks in the amount of $1,776 to nearly 1.5 million US service members, using money from the “billions of dollars” he says the government has collected through his tariffs.
“Because of tariffs, along with the just-passed One Big, Beautiful Bill, tonight I am also proud to announce that more than … 1,450,000 military service members will receive a special, we call ‘Warrior Dividend,’ before Christmas,” Trump said Wednesday night in a televised address to the nation.
But he alone can’t decide how the revenue from his sweeping tariffs gets spent.
All revenue the government collects, whether through ordinary taxes or tariffs, goes into a general fund managed by the Treasury department that is then used to pay the government’s expenses, such as distributing tax refunds. Any other use of the money has to be approved by Congress, which, so far, hasn’t happened for tariff collections.
“Money is fungible,” a White House spokesperson told CNN. “Just because Congress didn’t specifically appropriate tariff revenue to be used for the Warrior Dividend doesn’t change the fact that the government has more money available (because of tariffs) to pay for these sort of initiatives.” Congress did, however, sign off on Trump’s One Big Beautiful Bill Act, which earmarked money for the checks.
Regardless, not only is none of the $260 billion in tariff revenue being put toward that, but it is unlikely to be applied to anything (and certainly not everything) that Trump has promised.
First off, about half of the tariff revenue collected this year, or as much as $129 billion, is tied to a landmark tariff case the Supreme Court is expected to soon issue a ruling on. If the justices rule against Trump, the government may have to issue billions of dollars in refunds to importers.
But, refunds notwithstanding, here’s everything else Trump, at various points, has promised that tariff revenue collected during his second term would be used for:
Handing out $2,000 refund checks
Last month, Trump posted on Truth Social: “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.” Trump hasn’t specified what that income cap would be.
Paying down the national debt
While discussing refund checks, Trump has often brought up using tariff funds to help pay down the nation’s almost $40 trillion in federal debt. He has not specified how much he’d seek to pay down, but has said he’d “substantially” reduce the debt.
But even if Trump used every cent of the tariff revenue collected during his second term, it would only be able to pay off less than 1% of the national debt.
Helping fund child care
During a campaign event last year, Trump seemed to suggest that tariff revenue could be put toward making child care more affordable.
“With child care … those numbers are small, relative to the kind of economic numbers that I’m talking about, including growth, but growth also headed up by what the plan is that I just told you about,” Trump said at an event hosted by the Economic Club of New York. The president spoke extensively about his tariff plans throughout the event.
Covering tax cuts
Trump has said that any loss of government revenue that’s associated with many of the tax cuts his administration has either floated or enacted, including new limitations on the portion of tips subject to taxes, will be made up for with tariff revenue.
At a Cabinet meeting this month, for instance, Trump said: “I believe that at some point in the not‑too‑distant future, you won’t even have income tax to pay because the money we’re taking in is so great.”
Supporting farmers
Trump pledged to distribute “some of that tariff money” to farmers, many of whom have been hurt by tit-for-tat moves that countries, especially China, have taken in retaliation of higher tariffs on commodities.