The U.S. government’s budget deficit grew to US$291 billion in July despite a nearly US$21 billion increase in customs duty collections from tariff’s imposed by President Donald Trump, Reuters has reported.
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July’s deficit was up 19% or US$47 billion, from July 2024, as outlays grew faster than the receipt, the U.S Treasury Department said on Tuesday.
Receipts for the month grew 2%, or US$8 billion, to US$338 billion, while outlays jumped 10%, or US$56 billion, to US$630 billion, a record high for the month.
Treasury Department stated that the month of July 2025 had fewer business days than July 2024, adjusting the difference would have increased receipts by about US$20 billion, resulting in a deficit of about US$271 billion.
Net customs receipts in July grew to about $27.7 billion from about $7.1 billion in the year-earlier period due to higher tariff rates imposed by Trump, a Treasury official said. These collections were largely in line with the increase in June customs receipts after steady growth since April.
For the first 10 months of the fiscal year, customs duties totaled $135.7 billion, up $73 billion, or 116%, from the year-earlier period.
U.S. Treasury Secretary Scott Bessent told Fox Business Network’s “Kudlow” program that the growing U.S. tariff revenue will make it difficult for the Supreme Court to rule against Trump’s import taxes if a legal challenge to them makes its way to the country’s top court.
President Trump has touted the billions of dollars flowing into U.S coffers from his tariffs, however, some of the duties paid by companies importing the goods are often passed on to consumers in the form of higher prices.
Consumer price index data on Tuesday showed increases in prices for some tariff-sensitive goods like furniture, footwear and auto parts, but they were offset by lower gasoline prices in the overall index.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
