By David Lawder, Reuters
Shipping containers are stacked on container ships at the Port of Los Angeles on 25 June, 2025, in Los Angeles, California. Photo: AFP/ Getty Images - Mario Tama MARIO TAMA
US customs duty collections surged again in June, as US president Donald Trump's tariffs gained steam, topping $US100 billion for the first time during a fiscal year and helping produce a surprise $27b budget surplus for the month, the Treasury Department has reported.
The budget data showed that tariffs were starting to build into a significant revenue contributor for the federal government, with customs duties in June hitting new records, quadrupling to $27.2b on a gross basis and $26.6b on a net basis, after refunds.
The budget results are likely to reinforce Trump's view of tariffs as a lucrative revenue source and as a hammer to enforce non-trade foreign policy. On Tuesday, he said "the big money" would start to flow in, after he imposes higher "reciprocal" tariffs on US trading partners on 1 August.
US Treasury Secretary Scott Bessent said on X that the results showed the US "reaping the rewards" from 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.
Another promise made. Another promise kept.
— Treasury Secretary Scott Bessent (@SecScottBessent) July 11, 2025
Our nation is reaping the rewards from @POTUS’s America First 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… https://t.co/LN4HI66jJg
For the first nine months of fiscal 2025, the customs take reached records of $113.3b on a gross basis and $108b on a net basis, nearly double the prior-year collections. The US government's fiscal year ends on 30 September.
Based on those results, tariffs have now grown into the fourth-largest revenue source for the federal government, behind individual withheld receipts at $2.683 trillion for the fiscal year, non-withheld individual receipts at $965b and corporate taxes at $392b.
In the space of roughly four months, tariffs - as a share of federal revenue - have more than doubled to about five percent from about two percent historically.
The June budget surplus represented a turnaround from the $71b deficit in June 2024. The new tariff-related revenue helped boost total budget receipts last month by 13 percent - or $60b - to $526b, a record for that month, the US Treasury said. Outlays in June fell seven percent - or $38b - to $499b.
Adjusting for calendar shifts of some revenue and benefit payments, it said there would have been a budget deficit of $70b in June, along with a year-ago adjusted deficit of $143b.
The overall year-to-date deficit, however, increased five percent - or $64b - to $1.337 trillion, as outlays rose for healthcare programmes, Social security retirement benefits, defence spending, debt interest and the Department of Homeland Security, the US Treasury said.
Receipts for the first nine months of the fiscal year rose seven percent - or $254b - to a record $4.008t, driven in part by withheld taxes from higher employment and wages, while outlays grew six percent - or $318b - to a record $5.346t.
The Treasury's interest costs on the national debt continued to grow, exceeding all other individual outlays at $921b for the first nine months of the fiscal year, up six percent - or $53b - from the year-ago period, but the Treasury's weighted average interest rate largely had stabilised at 3.3 percent at the end of June, up two basis points from a year ago, a Treasury official said.
Bigger flow
Earlier this week, Bessent suggested a steeper ramp-up in tariff collections, telling a cabinet meeting that calendar-year 2025 collections could grow to $300b by the end of December.
At the June run rate, gross customs collections would hit $276.5b in six months, which means reaching Bessent's target would require some increases.
Ernie Tedeschi, economics director of the Budget Lab at Yale University, said it may take more time for the tariff revenue to fully ramp up, because businesses and consumers have sought to front run the duties by buying ahead.
Once that effect fades and Trump implements higher "reciprocal tariff" rates after a 1 August deadline, the Treasury may collect an extra $10b in tariffs per month, bringing the total to $37b, he said.
"I think there's a significant risk... that we get addicted to tariff revenue," said Tedeschi, who served as a White House economic adviser during the Biden administration. He added that tariff income could fade over time, as businesses and consumers adjust their behaviour.
This week, Trump has ratcheted up his tariff actions, announcing 50 percent levies on copper imports and goods from Brazil and a 35 percent tariff on Canadian goods, all due to start on 1 August.
The Trump administration is preparing more sector-based tariffs on semiconductors and pharmaceuticals.
- Reuters
