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This may not be a ‘dividend’ payment in the traditional sense of the word, but that’s how it is being treated.

Supreme Court Delivers Blow to Tariff Agenda

In a 6-3 ruling issued on February 20, 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not grant the president authority to impose tariffs. The decision invalidated a significant portion of the broad tariffs implemented earlier in the administration, which had been justified under emergency declarations related to issues like trade deficits and drug trafficking.

The ruling stemmed from consolidated cases challenging the president's use of IEEPA to levy duties on imports from numerous countries. Chief Justice John Roberts, writing for the majority, emphasized that Congress holds the constitutional power to impose taxes and duties, and IEEPA's language—allowing the president to "regulate ... importation"—does not extend to setting tariffs of unlimited scope, amount, or duration. No prior president had interpreted the 1977 law this way in its nearly 50-year history.

The decision creates immediate uncertainty for trade policy and federal revenue expectations. While the court did not address refunds for tariffs already collected—estimated in the tens to hundreds of billions of dollars—the prospect of reimbursing importers could further diminish any surplus funds.

Trump's Response and Shift to Alternative Authority

President Trump responded swiftly, criticizing the ruling and announcing new measures. He invoked Section 122 of the Trade Act of 1974 to impose a temporary 10% import duty on most goods from all trading partners, effective shortly after the announcement. Furthermore, he pushed it to 15% quickly. This authority allows surcharges of up to 15% for a maximum of 150 days to address international payment imbalances, after which congressional approval would be required for continuation.

Treasury Secretary Scott Bessent indicated that revenue from these and other existing tariff mechanisms (such as Sections 232 and 301) would remain largely stable despite the IEEPA setback. Administration officials have stressed a commitment to using tariff proceeds for the benefit of Americans, though details remain limited.

Tariff Dividend Checks: From Promise to Unlikely Outcome

President Trump first proposed direct payments funded by tariff revenue in mid-2025, describing them as a "dividend" for Americans. In July 2025, Senator Josh Hawley introduced the American Worker Rebate Act, which aimed to provide stimulus-like checks using tariff collections. The bill was referred to the Senate Finance Committee but has not advanced.

Later statements amplified the idea: in November 2025, the president posted on Truth Social that a dividend of at least $2,000 per person (excluding high-income individuals) would be distributed. National Economic Council Director Kevin Hassett and others suggested a proposal would go to Congress, with potential issuance toward the end of 2026.

Experts now view this as highly improbable. Stephen Kates, a financial analyst and certified financial planner at Bankrate, described tariff dividends as "a long shot from the beginning." He noted that the White House lacks unilateral authority to issue broad stimulus payments—such programs require congressional legislation. In the wake of the Supreme Court defeat and persistent partisan divisions in Washington, securing approval faces steep hurdles.

"Even if tariffs return to prior levels and generate revenue for a broad stimulus program, there does not appear to be sufficient political support to move such a measure through Congress," Kates said. "The odds of this policy moving forward are now effectively zero."

Brett House, an economics professor at Columbia Business School, echoed the skepticism, pointing to the widening federal deficit as a reason to doubt any checks would materialize. Even under alternative tariff structures, revenue projections may not yield the surpluses needed for widespread distributions, especially if refunds to importers become necessary.

Broader Implications and Unresolved Questions

Tariffs function as taxes on imports, typically paid by U.S. importers and often passed on to consumers via higher prices. The invalidated tariffs generated substantial revenue but also raised costs for businesses and households. Potential refunds to importers—who bore the initial burden—could offset any accumulated surplus, complicating dividend plans further.

Experts like Tomas Philipson, a University of Chicago professor and former White House Council of Economic Advisers acting chair, observed that any refunds would likely prioritize those who paid the now-invalid duties rather than funding new benefits.

The administration's pivot to Section 122 provides short-term continuity, but its temporary nature and the need for eventual congressional involvement introduce more variables. Ongoing legal and administrative processes around refunds, eligibility, and application procedures remain unclear.

For now, the promise of $2,000 tariff-funded checks appears increasingly distant, overshadowed by legal setbacks, fiscal realities, and political obstacles. Americans hoping for direct relief from tariff revenue may need to temper expectations as the policy landscape evolves.

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