Photo illustration -American consumers pay the tariff costs that Uncle Sam returns to them as a $5,000 “dividend.”
Calling tariffs “market access fees” does not change who bears their cost—and requiring the money to be spent only in America would be difficult to enforce and economically meaningless.
By: Vlad Green- Opinion
There is now a push in the Senate to transform President Donald Trump’s promise of $5,000 checks for Americans into legislation.
Senator Bernie Moreno, Republican of Ohio, reportedly plans to introduce a bill after the midterm elections. He says the payments would not come from taxpayers. Instead, they would be financed through what he calls structural tariffs—or “market access fees”—imposed on foreign goods entering the United States.
There would be another condition: the money could be spent only inside the United States.
The proposal may sound attractive. Who would object to receiving $5,000, particularly when American families are struggling with high prices?
But before celebrating this promised dividend, Americans should ask two elementary questions:
Who will actually pay for it?
And:
How could the government guarantee that it is spent only in the United States?
Who pays a tariff?
Calling a tariff a “market access fee” does not change what it is.
A tariff is a tax imposed on imported goods. It is collected by the United States government from the importer of record—usually an American company—when the merchandise enters the country.
The foreign government does not write a check to the U.S. Treasury.
An American importer pays the tariff and then must decide what to do with the additional expense. It can absorb some of the cost through lower profits, pressure the foreign supplier to reduce its price, cut expenses elsewhere or pass the cost along to customers through higher prices.
In practice, the burden is distributed, but American companies and consumers bear most of it.
Research by the Federal Reserve Bank of New York estimated that nearly 90% of the economic burden from the 2025 tariffs fell on American firms and consumers.
That leads to an unavoidable conclusion: if tariff revenue finances the $5,000 checks, Americans will be paying much of the cost of their own “dividend.”
The government would collect more money from businesses and households through higher import costs and then return some of that money in the form of checks.
That is not free money. It is redistribution disguised as prosperity.
The numbers do not add up
The scale of the proposal makes its financing even more questionable.
Sending $5,000 to approximately 240 million American adults would cost roughly $1.2 trillion. Current tariff revenue would not come close to covering that amount.
Congress would therefore have to do at least one of four things:
- impose substantially higher tariffs;
- limit the checks to a much smaller group;
- cut other federal programs;
- or borrow the difference and add it to the national debt.
Higher tariffs would mean higher costs for American importers, manufacturers and consumers. Borrowing the money could increase the deficit, place additional pressure on interest rates and eventually leave taxpayers responsible for repaying the debt.
In either case, somebody must pay.
Government can move money from one pocket to another. It cannot create $1.2 trillion in genuine prosperity merely by calling a payment a dividend.
How can the money be restricted to America?
Senator Moreno says the $5,000 must be spent only in the United States.
But how would that requirement work?
The government could issue a special debit card or electronic account programmed to reject purchases processed by foreign merchants. It could prevent direct cash withdrawals and prohibit transfers to overseas bank accounts.
Such a system may sound technically possible, but its enforcement would quickly become complicated.
Would an airline ticket purchased from an American airline for a trip to Europe qualify as domestic spending? What about a hotel room reserved through an American travel website? Would a Japanese automobile purchased from a dealership in Ohio count as an American purchase? What about a product ordered from an American retailer but manufactured in China?
Where a payment is processed does not necessarily tell us where the product was made, where the economic benefit ultimately goes or whether the purchase supports American workers.
Online commerce, multinational corporations and global supply chains make the distinction between “spent in America” and “spent abroad” far less straightforward than the senator suggests.
Enforcement would also require rules, monitoring, financial intermediaries and probably a new administrative system—all of which would cost money.
But there is an even more fundamental problem: money is fungible.
Suppose an American family ordinarily spends $5,000 of its own income on rent, groceries, utilities and medical expenses. If it receives a restricted government payment, it can use that payment for those domestic expenses.
The family’s original $5,000 is then freed for anything it chooses—including foreign travel or purchases from abroad.
The government may be able to track the particular dollars placed on a special card. It cannot control the other dollars those payments replace.
The domestic-spending restriction would therefore be more political symbolism than meaningful economic policy.
A “dividend” normally comes from profit
The word “dividend” also deserves examination.
A company pays a dividend when it earns a profit and distributes part of that profit to its shareholders. But the federal government is not operating with a surplus from which to distribute profits. It is already spending substantially more than it collects.
This proposed payment would not represent a share of newly created national wealth. It would be financed through taxes on imports, higher prices, additional borrowing or some combination of the three.
Calling it a dividend may make it sound rewarding. Calling tariffs “market access fees” may make them sound as if foreigners are paying admission to the American market.
Neither expression changes the underlying arithmetic.
Give voters the complete bill
This proposal is particularly troubling because it has become connected to the outcome of the midterm elections.
A major public payment should be debated on its economic merits, not presented as a reward that depends on one party retaining control of Congress.
Before acting, Congress should provide clear answers:
How many people would qualify?
How much tariff revenue would actually be available?
How large would the funding shortfall be?
Would the government borrow the difference?
How much could tariffs raise consumer prices?
How would domestic spending be defined?
How much would monitoring and enforcement cost?
And why should Americans believe that these checks represent new wealth when they may have paid for much of them through higher prices?
American voters are capable of understanding the difference between prosperity and a political giveaway.
In the age of instant information and artificial intelligence, slogans can be examined almost immediately. Renaming a tax does not conceal its cost, and attaching restrictions to a payment does not make those restrictions economically meaningful.
Before politicians promise every American $5,000, they should present the entire calculation—not merely the amount printed on the check.
Respecting voters begins by trusting them with the truth.
