Peter Schiff criticizes Trump’s tariff dividend proposal

Economist Peter Schiff sharply criticized the idea, arguing that such payouts would provide no real economic benefit and instead deepen trade imbalances. He noted that the total cost of the payments would exceed actual tariff revenues, while the added consumer income would boost demand for imported goods – widening the trade deficit and undermining the purpose of the tariffs.

Schiff said redistributing tariff revenue through direct payments would fail to stimulate domestic production. Instead, it would drive short-term consumption and weaken the dollar’s purchasing power through higher import spending. If Americans use the funds to buy foreign goods, he warned, inflation will accelerate.

His comments come as Trump continues to defend his tariff policy amid bipartisan criticism and ongoing legal disputes in the Supreme Court. The president insists that tariffs have made the U.S. “the richest and most respected nation in the world,” citing record stock market highs and low inflation.

Treasury Secretary Scott Bessent clarified that the tariff dividend could take the form of tax breaks, including exemptions on tips, overtime pay, and social benefits. Schiff countered that such measures would expand the deficit rather than shrink it.

He reiterated that tariffs are a hidden tax that raise consumer prices and fail to address structural trade issues. Schiff called Trump’s plan “populism disguised as economic growth,” arguing that it may deliver short-term political gains but at the expense of long-term stability.

Schiff concluded that combining generous payouts with protectionism could harm more industries than it helps, making the U.S. less competitive globally.
This is not Schiff’s first public confrontation – earlier, he clashed with Binance founder CZ, and the two agreed to hold a debate.