Tariff Revenue Rises, Sending Deficit to Third-Biggest Ever
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U.S. tariff revenue hit a new monthly record in August, reflecting President Donald Trump’s tariff hikes, though that still left the federal government with the third-biggest deficit on record so far this fiscal year.
Customs duties climbed to $30 billion last month, marking a 296% surge over August last year, a Treasury Department release showed Sept. 11. At the same time, the monthly budget deficit came in at $345 billion. August’s deficit was 15% wider than the same month the year before after accounting for calendar differences.
For the first 11 months of the fiscal year, tariff revenue totals $172 billion. Treasury Secretary Scott Bessent said during a Cabinet meeting in August he expects tariff revenue to grow month-over-month through the end of the year, potentially heading toward a $500 billion annual pace. He also has expressed confidence that the Supreme Court will validate Trump’s invocation of a national emergency for much of the tariffs he has put in place.
For all the surge in revenue, however, the total budget gap for the fiscal year through August came in at $1.973 trillion, the report showed. That is only surpassed by 2020 and 2021, a senior Treasury official said on a call with reporters — a time when the U.S. was spending extraordinary amounts to cope with the COVID crisis.
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After adjusting for calendar differences and removing the impact of deferred tax payments received in 2024, the Treasury official said the year-to-date deficit was 5% narrower than the same period a year ago. The official also noted that the final month of the fiscal year, September, is a major tax-receipt month — suggesting the full 2025 fiscal year gap may come in less than the year-to-date figure.
Corporate Taxes
While tax revenue from individuals continued to climb in August, reflecting higher wages and number of workers, the month also saw a notable plunge in corporate tax receipts. Asked whether this reflects the enactment of Trump’s tax cut legislation — which offered credits for businesses — the Treasury official declined specific comment, while highlighting that August tends to be a small month for corporate levy receipts. September may offer more information, the official indicated.
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As it currently stands, the U.S. is on track to fall just shy of $300 billion by year’s end, assuming the revenue from tariffs stays close to August’s $30 billion tally.
Bessent has said would be “terrible” for the department if the Supreme Court rules against the administration on tariffs, saying it faces the prospect of refunding approximately half the amount that has been collected so far.
