Background on the Key Player: President Donald Trump
President Donald Trump has long advocated for tariffs as a lucrative revenue source. In June, his trade tariffs significantly contributed to customs duties surpassing $100 billion for the first time during a fiscal year, resulting in an unexpected budget surplus of $27 billion.
Record-Breaking Customs Duties in the First Nine Months of FY 2025
In the first nine months of fiscal year 2025, customs duties reached unprecedented levels, with gross collections amounting to $113.3 billion and net collections totaling $108 billion—nearly double the previous year’s figures.
Tariffs as a Major Income Source for the Federal Government
With these results, tariffs have become the fourth-largest source of income for the federal government. The June budget surplus marked a shift from the $71 billion deficit in June 2024.
Increased Income from Tariffs Boosts Overall Revenue
The new revenues related to tariffs helped increase total budgetary income in June by 13%, or $60 billion, to $526 billion—a record for that month. Spending in June decreased by 7%, or $38 billion, to $499 billion.
Growing Global Deficit Despite June’s Surplus
However, the overall deficit for the year increased by 5%, or $64 billion, to $1.337 trillion, as spending rose for healthcare assistance programs, Social Security retirement benefits, defense expenses, and national debt interest payments, according to the Treasury Department.
Key Questions and Answers
- Who is President Donald Trump and why is he relevant? President Donald Trump has been a significant figure in US trade policy, advocating for tariffs as a means to boost federal income. His administration’s trade measures, including the imposition of higher tariffs on US trading partners, have led to record-breaking customs duties collections.
- What are customs duties, and why are they important? Customs duties are taxes imposed on imported goods. They serve as a crucial source of revenue for governments and play a significant role in shaping international trade policies.
- How have tariffs impacted the US federal government’s income? Tariffs have become an essential source of income for the federal government, contributing to a budget surplus in June 2025. In the first nine months of fiscal year 2025, customs duties collections nearly doubled compared to the previous year.
- What is the significance of the June 2025 budget surplus? The June 2025 budget surplus of $27 billion marked a shift from the $71 billion deficit in June 2024, demonstrating the impact of tariffs on federal income.
- How did tariff-related income affect overall budgetary revenue in June 2025? Tariff-related income increased total budgetary revenue by 13% in June 2025, contributing to a record-breaking $526 billion.
- Why did the global deficit increase despite June’s surplus? Although there was a budget surplus in June 2025, the global deficit grew by 5% due to increased spending on healthcare assistance programs, Social Security retirement benefits, defense expenses, and national debt interest payments.
