US budget deficit narrowed slightly at $1.8 tn despite tariff revenue

The US budget deficit narrowed just slightly over the past year, despite a surge in customs revenues, which hit a record as President Donald Trump imposed wide-ranging tariffs after returning to the White House.

The overall deficit shrank by two percent, or $41 billion, for the 2025 fiscal year ending in September, said the Treasury Department on Thursday.

This came as interest paid on the public debt climbed to a record as well, at $1.2 trillion, while health spending picked up.

These were not offset by a notable jump in customs duties collected, which includes tariffs.

The amount of such duties collected rocketed from $84 billion to $202 billion year-on-year, Treasury data showed.

Taxes paid by individuals also picked up by six percent over the year to $3.5 trillion, from $3.3 trillion.

But gross corporate taxes collected slipped by 14 percent to $486 billion.

Trump has imposed sweeping tariffs on US trading partners since returning to the presidency this year, while targeting certain sectors like steel, aluminum and automobiles with specific rates.

But the global tariffs Trump imposed while tapping emergency economic powers have faced legal challenges, with the Supreme Court due to hear arguments on their legality next month.