WASHINGTON, July 11 (Reuters) - The latest report from the Treasury Department reveals a significant surge in U.S. customs duty collections for June, attributed to the increasing impact of President Donald Trump's tariffs. For the first time in a fiscal year, customs duty collections surpassed the $100 billion mark, resulting in an unexpected $27 billion budget surplus for the month. This development underscores the growing role of tariffs as a vital revenue stream for the federal government.
In June, customs duties set new records, with collections reaching a staggering $27.2 billion on a gross basis and $26.6 billion after accounting for refunds. This figure represents a near quadrupling compared to previous months. Trump's administration has consistently promoted tariffs as a profitable source of income, claiming that significant revenue would materialize following the implementation of higher reciprocal tariffs on U.S. trading partners, set to begin on August 1.
During the first nine months of fiscal 2025, customs revenue hit new heights, with collections amounting to $113.3 billion on a gross basis and $108 billion net, nearly doubling the collections from the previous year. These tariffs have now ascended to become the fourth-largest revenue source for the federal government, trailing only behind individual withheld receipts, non-withheld individual receipts, and corporate taxes.
In a striking shift, tariffs as a percentage of federal revenue have more than doubled within a mere four months, climbing to around 5% from the historical average of approximately 2%. The fiscal year 2025 spans from October 1, 2024, to September 30, 2025.
The budget surplus for June marked a notable turnaround from the $71 billion deficit recorded in June 2024. The influx of tariff-related revenue contributed to a 13% increase in total budget receipts last month, amounting to $526 billion—a record for the month. Meanwhile, outlays decreased by 7%, or $38 billion, to $499 billion. However, after adjusting for calendar shifts in revenue and benefit payments, the Treasury indicated that a budget deficit of $70 billion would have emerged in June, compared to an adjusted deficit of $143 billion a year earlier.
Despite the surplus in June, the overall year-to-date deficit saw a 5% increase, totaling $1.337 trillion. This was primarily driven by rising expenditures on health care programs, Social Security benefits, defense spending, and interest on the national debt. For the first nine months of the fiscal year, total receipts increased by 7%, reaching a record $4.008 trillion, while outlays rose by 6% to $5.346 trillion.
Interest costs associated with the national debt continue to escalate, reaching $921 billion for the initial nine months of the fiscal year, reflecting a 6% increase from the previous year. Nonetheless, the Treasury's weighted average interest rate stabilized at 3.3% by the end of June, up two basis points year-over-year.
In a recent cabinet meeting, Treasury Secretary Scott Bessent hinted at a potential acceleration in tariff collections, suggesting that totals could reach $300 billion by the end of December 2025. At the current rate, gross customs collections could approximate $276.5 billion within six months, indicating that achieving Bessent's target may require additional increases.
Bessent also mentioned that the Congressional Budget Office (CBO) has estimated tariff-related income might total around $2.8 trillion over the next decade, a figure that may be conservative. President Trump has set a new deadline of August 1 for the implementation of higher reciprocal tariff rates on nearly all U.S. trading partners, allowing for negotiations with some countries in the coming weeks.
In recent developments, President Trump has intensified his tariff strategy, announcing a 50% levy on copper imports and goods from Brazil, along with a 35% tariff on Canadian products, all set to take effect on August 1. Furthermore, the Trump administration is preparing to introduce additional sector-based tariffs targeting semiconductors and pharmaceuticals.
This evolving tariff landscape continues to shape the economic framework of the United States, with significant implications for both domestic and international trade.
