Tariff boom pushes US customs revenue to record $113 billion, June surplus surprises

The US Treasury Department reported a historic surge in customs duty collections for June 2025, propelling total tariff revenues for the fiscal year past the $100 billion mark for the first time. Last month, driven by President Donald Trump’s aggressive trade policies, customs duties brought in a record $27.2 billion on a gross basis and $26.6 billion on a net basis after refunds, contributing to an unexpected $27 billion federal budget surplus for June.

For the first nine months of the 2025 fiscal year, which ends September 30, gross customs collections reached $113.3 billion, nearly double the same period in 2024. Net collections after refunds stood at $108 billion. The increase comes amid a renewed push by the Trump administration to use tariffs as both a revenue tool and a diplomatic lever.

Tariffs now key revenue stream

Customs duties have now become the fourth-largest source of revenue for the federal government, following withheld individual income taxes ($2.68 trillion), non-withheld individual income taxes ($965 billion), and corporate taxes ($392 billion). Tariffs now account for around 5 per cent of total federal revenue, up from roughly 2 per cent historically.

The Treasury Department credited the June surplus to a combination of increased receipts and reduced outlays. Total federal receipts rose by 13 per cent month-on-month to $526 billion for the month, while outlays declined by 7 per cent to $499 billion. However, adjusted for timing shifts in revenue and payments, the June budget would have reflected a $70 billion deficit, compared to an adjusted $143 billion deficit in June 2024.

Despite the monthly surplus, the overall budget deficit for the fiscal year to date has climbed by 5 per cent, reaching $1.337 trillion. Rising expenditures in health care programs, Social Security, defence, and debt servicing contributed to the growing shortfall.

Debt interest hits record as spending grows

Interest payments on the national debt reached an all-time high of $921 billion in the first nine months of the fiscal year, up 6 per cent from the same period last year. Although the Treasury’s weighted average interest rate held steady at 3.3 per cent, the mounting cost of servicing debt remains a major fiscal concern.

President Trump has leaned heavily into tariffs since returning to office, recently announcing new levies on Canadian goods (35 per cent) and Brazilian imports (50 per cent), set to take effect August 1. Additional sector-specific tariffs targeting semiconductors and pharmaceuticals are reportedly in the works.

Treasury Secretary Scott Bessent projected this week that customs revenues could exceed $300 billion by year-end. However, economists warn that tariff revenues may decline over time as businesses adapt and trade flows shift. Still, the administration is banking on an immediate uptick, especially after Trump’s reciprocal tariff hikes take hold in August. As the federal government leans more heavily on trade duties, some experts caution the growing dependence could distort economic behaviour and spark retaliatory actions from trading partners.