Tariffs and the U.S. Budget: Navigating a Growing Deficit
In July, the U.S. budget deficit swelled to $291 billion, growing by nearly 20%. Despite a rise in customs duties due to President Trump's tariffs, expenditures outpaced receipts. For the fiscal year to date, the deficit reached $1.629 trillion, marking a 7% increase from last year.
The U.S. government's budget deficit surged by nearly 20% in July, amounting to $291 billion, the Treasury Department revealed on Tuesday. This increase occurred despite a notable boost in customs duty contributions, which climbed by roughly $21 billion due to President Donald Trump's tariffs. However, expenditures rose more rapidly than revenue.
July's deficit increased by 19%, or $47 billion, compared to July 2024. Revenue for the month rose by 2%, equating to $8 billion, totaling $338 billion, while expenditures surged by 10%, or $56 billion, reaching a high of $630 billion for the month. Fewer business days this July compared to last year meant that, when adjusted for this difference, revenues would have risen by about $20 billion, lowering the deficit to approximately $271 billion.
Treasury officials reported that net customs receipts soared to about $27.7 billion this July from $7.1 billion a year prior, due to Trump's higher tariff rates, maintaining the trend seen in June. These tariffs, heavily touted by Trump, result in additional costs for importing companies, and these expenses are often shared with consumers through price hikes.
(With inputs from agencies.)
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