Will a tariff stimulus impact the economy?

Sen. Josh Hawley’s (R-Mo.) proposal to send Americans rebate checks funded by tariff revenue—outlined in Kiplinger’s July 30 article, “Tariff Stimulus Checks Coming? New Proposal Seeks Tax Rebates for U.S. Workers”—raises a familiar set of questions: Will it work? Who benefits? And perhaps most importantly, what do we really know about stimulus checks?

Unlike past programs funded through borrowing, the administration would rely on surging tariff revenue, which reportedly reached $113 billion in fiscal year 2025, including a staggering $27 billion collected in June alone. Under the proposal, individuals and children would each receive at least $600, with phase-outs for higher-income earners. It’s a novel twist on an old debate.

Stimulus checks, by design, aim to give consumers cash quickly, hoping to spur spending and revive economic activity. In the short term, they often succeed—particularly among lower-income households who tend to spend that money on necessities like food, rent, and utility bills. When well-targeted, the multiplier effect can exceed the initial cost of the program. That’s the theory.

The real-world record, however, is murkier. The economic boost is typically brief. Once the money’s spent, so is the stimulus—unless other support systems are in place. Higher-income earners often bank their checks or pay down debt, which may be wise on a personal level, but it doesn’t ripple through the economy with much urgency.

There’s also the question of fiscal responsibility. Critics like economist Art Laffer argue that all government stimulus is, at best, a zero-sum game. “Every stimulus,” Laffer has said, “is offset by an equivalent destimulus”—a drag on the economy through taxation or inflation. Similarly, Ernie Goss of Creighton University points to the post-COVID inflation spike, citing a 35–40% increase in the money supply as a key contributor—fueled, in part, by generous transfer programs.

Political leaders reflect the divide. Senator Rand Paul has dismissed blanket stimulus payments as “a really foolish, eggheaded, left-wing, socialist idea.” Senator John Kennedy, more pragmatic, supported earlier stimulus packages when people were “suffering through no fault of their own,” but railed against later spending bills he called “chock-full of spending porn.” Newt Gingrich, once a staunch critic of large-scale stimulus, later urged Senate Republicans to support $2,000 direct checks—arguably less for economic principle than for political survival in Georgia’s 2021 Senate runoff.

As for the new tariff-based proposal? That remains a question mark. Kiplinger notes that despite the flood of tariff revenue, the U.S. still faces a $1.4 trillion deficit. Whether these funds should be used for stimulus or debt reduction is a matter of heated debate and there’s no guarantee Congress will approve the plan at all.

In the meantime, Americans can begin calculating what $600 could buy—about 100 dozen eggs at today’s prices, depending on the carton and the chicken. Ironically, eggs aren’t typically subject to tariffs, which makes them perhaps the most neutral of purchases in a politically charged economy.

Ultimately, the economy is a sprawling, complex organism. While stimulus checks can offer temporary relief or boost demand, it’s far from clear whether any single action—tariff-funded or not—can produce lasting, positive outcomes.