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Economist Peter Schiff issued a stark warning against President Donald Trump‘s proposal for a “$2,000-per-person tariff dividend,” arguing the plan is economically self-defeating and would “defeat the very purpose of the tariffs.”
In a post on the X platform on Monday, Schiff, the chief economist & global strategist at Europac.com, contended that the total cost of the proposed dividends would “exceed tariff revenue.”
He further argued that instead of bolstering the U.S. economy, the payouts would lead to an increased trade deficit.
“Consumers will use the extra income to buy more expensive imports, despite the tariffs,” Schiff wrote, concluding this would “[increase] our trade deficit.”
The criticism came in response to President Trump’s Nov. 9 social media post calling tariff opponents “FOOLS!” and touting a “Record Stock Market Price.”
Trump claimed the U.S. is “taking in Trillions of Dollars” from levies, which would be used to “pay down our ENORMOUS DEBT” and fund the “dividend of at least $2000 a person (not including high-income people!).”
Schiff’s skepticism joins a divided reaction from other financial commentators. Some analysts viewed the proposal as a form of market-boosting stimulus. Anthony Pompliano noted that “Stocks and bitcoin only know to go higher in response to stimulus.”
While Shay Boloor of Futurum Equities framed the plan as “returning tariff proceeds to taxpayers” and declared, “Stimulus checks are back.”
However, others echoed Schiff’s concerns about the plan’s inflationary potential. Otavio Costa of Crescat Capital posted a chart comparing current conditions to the 1970s, warning, “You can’t cure inflation by giving people money to spend, running a 6% government deficit, and having the Fed cut interest rates.” He advised investors to “stay focused on hard assets.”
Adding to the debate, Treasury Secretary Scott Bessent suggested the “$2,000 dividend” may not be a direct check as many, including the experts, had assumed.
In an appearance on ABC News, Bessent said the rebate could come in “lots of forms,” including “substantial deductions” in taxes. He implied the $2,000 figure might represent the cumulative value of other tax-cut proposals rather than a direct payment.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were higher in premarket on Monday. The SPY was up 0.97% at $677.49, while the QQQ advanced 1.54% to $619.14, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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