Despite tariff hikes, U.S. deficit year-to-date is third-largest on record
2025-09-12 15:14:28
U.S. tariff revenue hit a monthly record in August, reflecting President Trump's move to increase tariffs, but that still left the federal government's deficit so far this year at its third-highest on record.
A report released by the U.S. Treasury on Tuesday showed that tariffs climbed to $30 billion last month, a 296% surge from August of last year. Meanwhile, the monthly budget deficit reached $345 billion. Taking into account calendar differences, the August deficit was 15% wider than the same period last year.
Tariff revenue totaled $172 billion in the first 11 months of this fiscal year. U.S. Treasury Secretary Jeffrey Bessant said at a cabinet meeting in August that he expected tariff revenue to increase monthly by the end of the year, potentially reaching an annualized level of $500 billion. He also expressed confidence that the Supreme Court would uphold Trump's declaration of a national emergency for most of the tariffs he imposed.
However, Thursday's report showed that despite the revenue surge, the budget shortfall for the fiscal year ending in August totaled $1.973 trillion, a figure surpassed only by 2020 and 2021, when the United States was spending massive sums to respond to the COVID-19 crisis, a senior Treasury official said.
The Treasury official said the year-to-date deficit is 5% smaller than the same period last year after adjusting for calendar differences and removing the impact of deferred taxes received in 2024. The official also noted that September, the last month of the fiscal year, is a key tax revenue month, meaning the full shortfall for fiscal 2025 will likely be lower than the year-to-date figure.
A report released by the U.S. Treasury on Tuesday showed that tariffs climbed to $30 billion last month, a 296% surge from August of last year. Meanwhile, the monthly budget deficit reached $345 billion. Taking into account calendar differences, the August deficit was 15% wider than the same period last year.
Tariff revenue totaled $172 billion in the first 11 months of this fiscal year. U.S. Treasury Secretary Jeffrey Bessant said at a cabinet meeting in August that he expected tariff revenue to increase monthly by the end of the year, potentially reaching an annualized level of $500 billion. He also expressed confidence that the Supreme Court would uphold Trump's declaration of a national emergency for most of the tariffs he imposed.
However, Thursday's report showed that despite the revenue surge, the budget shortfall for the fiscal year ending in August totaled $1.973 trillion, a figure surpassed only by 2020 and 2021, when the United States was spending massive sums to respond to the COVID-19 crisis, a senior Treasury official said.
The Treasury official said the year-to-date deficit is 5% smaller than the same period last year after adjusting for calendar differences and removing the impact of deferred taxes received in 2024. The official also noted that September, the last month of the fiscal year, is a key tax revenue month, meaning the full shortfall for fiscal 2025 will likely be lower than the year-to-date figure.
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