US Budget Deficit Soars to Record $291 Billion in July, Outpacing Tariff Revenue

The U.S. government’s budget deficit expanded significantly in July, reaching $291 billion, despite a notable increase in customs duty collections from President Donald Trump’s tariffs, the Treasury Department announced recently. The deficit for July surged by nearly 20% compared to the previous year, highlighting a trend where government outlays are growing faster than receipts.

Specifically, the July deficit marked a 19% ($47 billion) increase from July 2024. While receipts for the month saw a modest 2% ($8 billion) rise to $338 billion, outlays jumped a substantial 10% ($56 billion) to a record high of $630 billion for the month. The Treasury Department noted that adjusting for fewer business days in July this year would still result in a substantial deficit of approximately $271 billion.

Customs receipts in July dramatically increased to about $27.7 billion from $7.1 billion in the same period last year, a direct result of higher tariff rates. Despite the President’s emphasis on tariff revenue, these duties are primarily paid by importing companies, with costs often passed on to consumers. Recent consumer price index data showed price increases in some tariff-sensitive goods like furniture, footwear, and auto parts, though these were mitigated by lower gasoline prices.

For the first 10 months of the fiscal year, customs duties totaled $135.7 billion, an impressive 116% ($73 billion) increase year-over-year. The overall year-to-date budget deficit now stands at $1.629 trillion, up 7% ($112 billion) from the prior year. Receipts for this 10-month period hit a record $4.347 trillion (up 6%), but outlays also reached a 10-month record of $5.975 trillion (up 7%), underscoring the widening fiscal gap.

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