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Treasury Secretary Scott Bessent on Tuesday threw cold water on the idea that Americans could soon receive tariff rebate checks.
Bessent, during an interview on CNBC’s “Squawk Box,” said that revenue from import tariffs will be put toward the US national debt.
“I think, at a point, we’re going to be able to do it,” he said, noting how S&P Global on Monday affirmed its AA+ credit rating on the United States. “But President [Donald] Trump and I are laser-focused on paying down the debt.”
Some lawmakers have proposed using tariff revenue to send rebate checks of at least $600 per adult and dependent child. A family of four could end up with around $2,400 from the federal government.
The United States has collected $100 billion in tariff revenue since April, when a large swath of Trump’s global tariffs went into effect, according to Treasury Department data through July. Trump, in touting the potential revenue from import taxes, has floated a couple of uses for those funds: First, to pay down the nation’s massive debt, but also to potentially give “a dividend” to the American people.
Bessent on Tuesday said that tariff revenue is on pace to exceed expectations.
“I’d been saying that tariff revenue could be $300 billion this year,” he said. “I’m going to have to raise that up substantially. I think that we’re going to bring down the deficit-to-GDP, we’ll start paying down debt, and then, at a point, that can be used as an offset to the American people.”
Bessent declined to provide details about how much higher revenues are expected to climb, other than saying it would be “substantial.”
Still, Bessent said he hopes there could be relief coming for Americans via lower interest rates.
The Federal Reserve has held interest rates steady since December of last year. The probability of a September rate cut has risen following a July jobs report that showed lackluster employment gains during the past three months, but those odds dropped from nearly 100% to the 80% realm after the latest batch of inflation data, released last week, showed a pickup in some price hikes both for businesses and consumers.
Bessent on Tuesday largely dismissed the gains, noting that a large portion of the pickup in the Producer Price Index’s inflation gauge was because of stock market gains.
“The real problem here is we’re seeing some distributional aspects to the higher rates, especially in housing and for lower-income households with high credit card debt,” he said. “We’re seeing this big [capital expenditures] boom, part of it is AI, part of it is the tax bill, and so capex is doing well; but households, home building is struggling.”
Bessent added that the Fed lowering rates could facilitate a pickup in home building, which, in turn, could help lower prices in the longer run.
“If we keep constraining home building, what kind of inflation does that create one or two years out?” he added.
July data from the US Census Bureau showed that the amount of new home construction ticked up significantly above expectations last month, rising 5.2% from June at a seasonally adjusted annual rate of 1.428 million. Economists expected a 0.3% increase at a rate of 1.31 million. Housing starts had been weak in the three months prior to July.
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