U.S. July Tariff Receipts Reach Record High, Yet Budget Deficit Continues to Grow

Data released by the U.S. Department of the Treasury show that customs tariff collections climbed to $28.0 billion in July, representing a 273 percent increase from the same month last year. However, after adjusting for calendar variations, the federal government still recorded a $291 billion budget deficit for July, marking a 10 percent year-over-year rise and underscoring the persistent gap between revenue gains and overall spending.

As the 2025 fiscal year approaches its September close, the United States is poised to post another substantial annual shortfall. Through the first ten months, the cumulative deficit stands at $1.63 trillion; once calendar adjustments and last year’s deferred tax receipts are accounted for, this total reflects a modest 4 percent improvement over the prior year. The Congressional Budget Office had anticipated that federal debt would not exceed $37 trillion until after fiscal 2030, yet that threshold was surpassed months ago.

The sharp contrast between record tariff revenue and growing deficits was most evident in July’s figures. Tariff receipts year-to-date have reached $142 billion, and the surge in June even produced a $27 billion monthly surplus—the first June surplus since 2015. Yet the $291 billion gap recorded in July stands as the second-largest July deficit on record, trailing only the spike in pandemic-related spending in July 2021. Taken together, today’s shortfall positions fiscal 2025 to rival the pandemic years of 2020 and 2021 as one of the most severe deficit periods in U.S. history.

A major driver of the budget outlook is the rising cost of servicing federal debt. In July alone, interest outlays reached $91.9 billion, bringing the ten-month total to a record $1.019 trillion. Full-year projections now anticipate interest expenses topping $1.2 trillion, making debt service the government’s second-largest spending category after Social Security. This escalation in borrowing costs places an increasing strain on federal finances.

Treasury Secretary Scott Bessent has previously forecast that tariff revenues for fiscal 2025 could approach $300 billion, with potential for even higher collections in 2026. Nevertheless, economists and the nonpartisan Congressional Budget Office agree that structural pressures—most notably rising interest payments and entitlement spending—will ultimately determine the trajectory of the nation’s fiscal health. The recent “Big and Beautiful” tax and spending legislation signed by President Donald Trump is expected to add an estimated $4.1 trillion to federal debt over the next decade, further complicating efforts to narrow the deficit.