Tariff Impact: Trump’s Customs Duties Smash $100 Billion Record, Shake Up US Budget

U.S. customs duties have smashed through the $100 billion barrier in a single fiscal year for the first time ever, as President Donald Trump’s aggressive tariff strategy delivers an unexpected boost to federal coffers and sparks a fierce debate over the long-term impact on the U.S. economy.

Treasury Department data released Friday showed that customs duty collections surged again in June, helping produce a surprise $27 billion budget surplus for the month. Gross customs receipts quadrupled to $27.2 billion in June compared to a year earlier, while net collections after refunds hit $26.6 billion, both new records.

For the first nine months of fiscal 2025, U.S. customs duty collections reached $113.3 billion on a gross basis and $108 billion net, nearly double the prior year’s take. That revenue growth has turned tariffs into the fourth-largest federal revenue source, trailing only withheld individual income taxes ($2.683 trillion), non-withheld individual receipts ($965 billion), and corporate taxes ($392 billion).

Overall, tariffs now account for around 5% of federal revenue—more than double the typical 2% share seen in previous years.

President Trump has championed tariffs as both a reliable revenue stream and a powerful geopolitical lever. Earlier this week, he declared that "the big money" would start to flow once he imposed higher "reciprocal" tariffs on U.S. trading partners starting August 1.

U.S. Treasury Secretary Scott Bessent celebrated the numbers on social media, claiming the U.S. is “reaping the rewards” of Trump’s tariff agenda. “As President Trump works hard to take back our nation’s economic sovereignty, today’s Monthly Treasury Statement is demonstrating record customs duties—and with no inflation!” Bessent said.

The June surplus marked a dramatic turnaround from the $71 billion deficit recorded in June 2024. Total federal receipts rose 13% year-over-year to a record $526 billion for the month, while spending fell 7% to $499 billion. However, after accounting for timing shifts in payments, the Treasury said the adjusted June budget would have shown a $70 billion deficit, versus an adjusted $143 billion deficit a year earlier.

Despite the strong monthly result, the overall U.S. deficit for the first nine months of fiscal 2025 still increased 5%, or $64 billion, to $1.337 trillion, due to rising outlays for health care, Social Security, defense, and interest on the national debt.

Treasury interest costs alone hit $921 billion for the nine-month period, up 6% from the prior year, though the average rate on government debt stabilized at 3.3%.

Secretary Bessent has forecast even bigger tariff inflows, suggesting this week that customs collections could hit $300 billion by the end of calendar 2025. At June’s pace, they would total about $276.5 billion in six months, implying the need for further increases to hit that target.

Trump’s next wave of tariff hikes includes new 50% duties on copper imports and goods from Brazil and a 35% tariff on Canadian goods, all set to start August 1. The administration is also preparing sector-specific tariffs on semiconductors and pharmaceuticals.

But some economists warn of potential risks. Ernie Tedeschi, a former Biden White House economic adviser and now at Yale University’s Budget Lab, said the government could become “addicted” to tariff revenue. While initial collections are surging, he cautioned that businesses and consumers will eventually adapt, possibly reducing revenue over time.

“Tariffs can look like easy money,” Tedeschi said, “but they’re also a hidden tax on American consumers and a gamble with the economy.”

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