This outcome would create massive administrative challenges. Costco (COST) and other major importers have already filed refund claims, anticipating a favorable verdict. Hassett warned that processing such a large volume of claims would strain government systems and finances.
In response to growing public attention, Trump has floated the idea of issuing $2,000 rebate checks funded by tariff revenue. Hassett now believes the checks are financially feasible. Trump is expected to bring the proposal to Congress in early 2026.
Moreover, Trump announced a “warrior dividend” of $1,776 for each of the 1.5 million active U.S. service members. He said the military bonus honors America’s founding and is backed by an unexpected surplus from tariffs. However, he did not provide a funding plan for the program.
Trump has proposed at least nine ways to spend tariff proceeds, including financing Republican tax cuts. However, with recent tariff rollbacks on key imports like coffee and oranges, monthly tariff revenues are now falling. They declined from $31.35 billion in October to $30.76 billion last month. This marks the first revenue decline since the trade war began, raising concerns about the sustainability of these funding promises.
Economic Warning Signs Mount Despite Stock Market Strength
While Trump softens his trade stance with China by approving Nvidia’s sale of H200 chips and reporting positive feedback from Xi Jinping, domestic economic indicators are flashing red. These developments highlight growing economic stress at home despite easing trade tensions.
Moreover, the cyclical employment is weakening. The chart below shows that the jobs in manufacturing, construction, transportation, and warehousing have dropped by 111,000 since February. These sectors account for less than 20% of the total workforce but usually lead to job losses in a downturn. A drop of 300,000 would trigger an official recession warning.