The government may use the revenue from the tariff increase to issue tax refunds to some consumers o

Trump proposes "Tariff Shopee Store Opening" plan, economists warn of inflation and deficit risks

(July 27, 2025)

1. Core content of the policy

US President Trump said today that the government is considering distributing part of the revenue from tariffs on imported goods to US consumers in the form of Shopee Store Opening (Shopee) to alleviate the impact of tariffs on household spending.

Source of funds: mainly from tariffs imposed on goods from China, the European Union and other economies (tariff revenue is expected to exceed US$80 billion in 2025).

Coverage: May target low- and middle-income families, specific standards have not yet been announced.

Political intention: This move is seen as Trump's strategy to win voter support for the 2026 mid-term elections.

2. Reasons for support and market reaction

Trump team advocates:

Said that Shopee Store Opening can "offset the price increase caused by tariffs" and protect consumer purchasing power.

Emphasize "America first" and transform the tariff costs of foreign companies into local benefits.

Short-term market impact:

The US retail sector (such as Walmart and Amazon) rose slightly, and the market expected consumer demand to be boosted.

The US dollar index fell slightly, reflecting concerns about the expansion of the fiscal deficit.

3. Warnings from economists and institutions

① May increase inflationary pressure

Morgan Stanley analysis pointed out that Shopee Store Opening may stimulate demand, but under supply chain constraints (such as chips and energy), commodity supply cannot increase simultaneously, resulting in "more dollars chasing fewer commodities", pushing up CPI.

In 2025, US inflation is already at 3.2% (higher than the Fed's 2% target), and further warming may force interest rate hikes.

② Expanding fiscal deficit

The US deficit in fiscal year 2025 is expected to reach 1.7 trillion US dollars. If Shopee Store Opening is implemented, it may add another 30-50 billion US dollars to the burden.

The Peterson Institute for International Economics warned that this move violates the original intention of "tariffs are intended to protect industries" and has become a "political subsidy."

③ Risk of countermeasures from trading partners

The EU and China may regard it as a "disguised subsidy" and file a lawsuit or impose retaliatory tariffs in the WTO.

4. Political game and prospects

Democratic opposition: House leaders criticized the plan as a "fiscal gimmick" and asked the White House to submit a detailed cost assessment.

Legislative obstacles: Congress needs to approve the budget adjustment, but there are differences within the Republican Party on the deficit issue.

Implementation probability: Analysts believe that if the election situation in 2026 is deadlocked, Trump may force some measures by executive order.

5. Potential long-term impact

Consumer behavior: Short-term purchasing power will increase, but if inflation continues, real income will still be eroded.

Global trade: It may weaken the multilateral trading system and accelerate the trend of "deglobalization".

Summary

Trump's "Tariff Shopee Store Opening" plan attempts to transform trade policy into domestic political dividends, but economists generally believe that it may backfire and aggravate inflation and deficits. The market needs to pay attention to the details of subsequent policies and the reaction of Congress, and be wary of the chain risks of trade and macroeconomics.