U.S. Budget Deficit Grows Despite Tariff Boost
The U.S. budget deficit rose nearly 20% in July, reaching $291 billion, despite increased customs duties from tariffs. Treasury data shows a mismatch between receipts and spending. As tariff rates rise, net customs receipts climbed, though companies bear the cost, leading to higher consumer prices on some goods.
In July, the U.S. government faced a significant budget deficit of $291 billion, marking a nearly 20% increase from last year, driven by faster growth in outlays compared to receipts, according to the Treasury Department.
Although customs duty collections rose due to tariffs, these are shouldered by importers and often passed to consumers. Treasury Secretary Scott Bessent noted potential legal challenges to tariffs, yet higher revenues complicate such actions.
The first 10 months of the fiscal year saw a $1.629 trillion deficit, with growth in government healthcare costs and rising interest on public debt contributing to the financial shortfall.
(With inputs from agencies.)
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