Treasury posts unexpected surplus in June as tariff receipts surge

The United States Treasury reported an unexpected budget surplus of $27 billion in June 2025, a significant turnaround from the deficit expected by economists. This surprising fiscal win is largely attributed to a surge in tariff receipts.

Here’s a breakdown of the key findings:

Surplus Driven by Tariffs: Customs duties collected in June quadrupled compared to June 2024, reaching a gross total of $27.2 billion ($26.6 billion net after refunds). This marked a new record for monthly tariff collections and a substantial increase from May’s figures.

Fiscal Year Milestone: For the first nine months of fiscal year 2025 (which ends on September 30), customs duties have topped $100 billion for the first time, reaching $113.3 billion gross and $108 billion net. This is nearly double the collections from the prior year.

Tariffs as Revenue Source: Tariffs have rapidly grown as a contributor to federal revenue, increasing their share from about 2% historically to around 5% in just four months. They are now considered the fourth-largest revenue source for the federal government, behind individual income taxes and corporate taxes.

Reduced Spending: In addition to the tariff windfall, total government outlays in June fell by 7% year-on-year to $499 billion, further contributing to the surplus.

Trump Administration’s View: Treasury Secretary Scott Bessent has credited the results to President Donald Trump’s tariff agenda, stating that the U.S. is “reaping the rewards.” Trump himself has indicated that “the big money” would start to flow after additional “reciprocal” tariffs are imposed on August 1.

Overall Budget Picture: Despite the June surplus, the overall year-to-date deficit for fiscal year 2025 has increased by 5% to $1.337 trillion. This is due to rising outlays for programs like healthcare, Social Security, defense spending, and interest on the national debt (which itself reached a record $921 billion for the first nine months of the fiscal year).

Economic Implications: While the tariffs have provided an immediate boost to federal revenue, critics warn of potential inflationary risks and supply chain disruptions. There are also concerns that tariff income could eventually fade as businesses and consumers adjust their behavior and supply chains. The Federal Reserve is reportedly watching the impact of tariffs on inflation before making decisions on interest rates.

This unexpected surplus highlights the direct financial impact of the Trump administration’s trade policies on the federal budget, even as the broader fiscal challenges of a large national debt and rising entitlement costs persist.