President Donald Trump says his administration will send more than a million one-time checks to U.S. military personnel, pitching the payments as a way to ease cost-of-living pressures—and crediting tariff revenue as one source of funding.
In a primetime address on Wednesday, Trump announced what he called a “warrior dividend” for 1.45 million service members, timed to arrive before the holidays. The move comes as the president faces softening approval ratings on the economy and heightened anxiety about affordability, concerns that some economists have linked to inflationary effects from his broad tariff agenda.
As he argued the economy is improving—while also blaming current conditions on the Biden administration—Trump pointed to mortgage-rate trends and housing reforms alongside the new payments.
“Military service members will receive a special—we call warrior dividend—before Christmas—a warrior dividend,” Trump said. “In honor of our nation’s founding in 1776, we are sending every soldier $1,776. Think of that. And the checks are already on the way.”
Trump suggested tariff collections played a role in making the checks possible.
“We made a lot more money than anybody thought because of tariffs, and the [One Big Beautiful] Bill helped us along,” he said. “Nobody deserves it more than our military.”
A senior administration official told Fortune the one-time payments will total about $2.6 billion and are intended as a housing supplement for eligible service members, including 1.28 million active-duty personnel and 174,000 reservists. Through the One Big Beautiful Bill, Congress appropriated $2.9 million to the Department of Defense for supplements for basic housing allowances.
The White House did not respond to questions about how tariff revenue would specifically be used to finance the checks.
Tariff revenue still trails projections
The nearly 1.5 million payments are the latest form of relief Trump has linked to tariff proceeds. In recent months, he has also associated tariffs with a $12 billion aid package for farmers affected by trade disruptions, floated $2,000 rebate checks for Americans, and claimed the money could help reduce the $38 trillion national debt.
But the revenue picture has not matched the administration’s public projections. After the White House rolled back tariffs on some grocery staples—such as bananas, coffee, and beef—economists adjusted their estimates downward. Analysts at Pantheon Macroeconomics said in a recent report that customs duties are generating roughly $400 billion a year, about $100 billion below the half-trillion-dollar figure Treasury Secretary Scott Bessent forecast in August.
The analysts attributed the gap largely to weaker imports from China. Chinese imports were down 7.5% year over year in October and 7.8% in November, according to supply-chain software company Descartes Systems Group, as firms shifted sourcing toward countries such as Vietnam where tariff rates are lower. The decline follows an earlier surge in shipments as businesses rushed to stockpile goods before higher levies took full effect.
There are also signs tariff receipts may have plateaued. The Treasury Department’s monthly statement released last week showed $30.75 billion in customs duties collected in November, down from $31.35 billion in October. From April—after Trump announced “Liberation Day” tariffs—through October, revenues had been rising month over month.
Even the administration has offered caution around the idea of directly redistributing tariff proceeds. In mid-November, Bessent told Fox News’ Sunday Morning Futures that “we will see” about tariff-funded rebate checks.
Earlier last month, in an interview on ABC’s This Week With George Stephanopoulos, Bessent suggested the $2,000 dividends could instead come through tax breaks already signed into law.
“Those are substantial deductions that, you know, are being financed in the tax bill,” Bessent said.
