WASHINGTON (AP) – Despite the U.S. taking in record income from President Donald Trump’s tariffs in July – with a 273% increase in customs revenues (or $21 billion) from this time last year – the U.S. budget deficit is still higher, according to Treasury Department data released Tuesday.
US July budget deficit up 20% year-over-year despite record Trump tariff income
WASHINGTON (AP) – Despite the U.S. taking in record income from President Donald Trump’s tariffs in July – with a 273% increase in customs revenues (or $21 billion) from this time last year – the U.S. budget deficit is still higher, according to Treasury Department data released Tuesday.
The government’s shortfall has climbed 20% this fiscal year compared to the same period in 2024.
Even as Trump talks about America becoming rich because of his import tax hikes, federal spending keeps outpacing the revenues collected by the government. That financial picture might change as companies exhaust their pre-tariff inventories, forcing them to import more goods and generate even more in tax revenues that could whittle away at the deficit without meaningfully reducing it as promised.
If tariffs fail to deliver on Trump’s pledge to improve the government’s balance sheet, the American public could be faced with fewer job options, more inflationary pressures and higher interest rates on mortgages, auto loans and credit cards. The budget deficit is the annual gap between what the U.S. government raises in taxes and what it spends, over time feeding into the overall national debt.