Is US President Donald Trump taking a leaf out of Indian politicians' populist playbook to keep his folks together?
In an apparent bid to reconnect with disillusioned voters after major election setbacks, Trump has proposed a one-time “dividend” payment of at least $2,000 for most American citizens. Trump said the funds would come from the billions of dollars collected through his administration’s aggressive tariff policies.
The announcement, made on his Truth Social platform on Sunday, did not specify income limits, a payment schedule, or whether the plan would require congressional approval. High-income citizens would be excluded from the payout, Trump said, without elaborating on thresholds.
The proposal follows the Republican Party’s disappointing performance in last week’s local and state elections, where Democrats flipped key governorships in New Jersey and Virginia and made surprise gains in Georgia — a traditional Republican stronghold. Analysts see Trump’s sudden populist gesture as an attempt to shore up support among middle- and lower-income voters struggling with high living costs.
Inflation in the United States remains stubborn at around 3 percent, fuelling frustration among working-class voters despite a record-high stock market. Trump, however, praised his economic record, calling the US “the richest and most respected country in the world” and dismissing critics of tariffs as “fools”. He claimed the trade duties on imports, especially from China, would eventually generate “trillions of dollars” for the government and help reduce the national debt.
But many American small businesses disagree. They have long argued that tariffs raise input costs, squeezing margins and consumer prices. Several firms have taken the issue to court, with a key case recently heard by the US Supreme Court.
Treasury Secretary Scott Bessent suggested on ABC’s This Week that the proposed $2,000 dividend could be linked to tax cuts already enacted under Trump’s economic reform agenda. These include exemptions on tips, overtime pay and social security income, as well as possible deductions for auto loans.
“The $2,000 dividend could come in lots of forms — it could simply be part of the president’s tax relief plan,” Bessent said, though he clarified that he had not discussed the idea directly with Trump.
The idea of direct payments to citizens is not new for Trump. During his first term, his administration issued stimulus cheques as part of the Covid relief package. Earlier this year, he floated a similar plan to return savings from government spending cuts to taxpayers.
Observers say this latest proposal fits Trump’s pattern of populist economics — combining trade nationalism with cash benefits to voters. However, economists warn that using tariff revenues for direct transfers could increase fiscal strain if global trade tensions deepen or imports slow.