FX.co ★ US Budget Deficit Shrinks on Surge in Tariff Revenues

In May, the U.S. government reported a budget deficit of $316 billion, representing a 9% decrease compared to the previous year. This decline is partly attributed to a significant rise in customs revenues, which reached a record $23 billion, spurred by new tariffs introduced by President Trump. These tariffs led to an increase in port-of-entry collections, with gross customs receipts surging from $6 billion in May 2024. Consequently, customs revenue for the year-to-date saw an impressive near 60% increase, climbing to $86 billion. This substantial boost contributed to a 15% year-over-year rise in total receipts for May, which reached $371 billion, while expenditures rose to $687 billion. When accounting for calendar adjustments related to June benefit payments, the corrected deficit for May stands at $219 billion—marking a 17% reduction from the equivalent figure in 2024. Additionally, interest payments on the national debt, the government's largest expense, decreased by 10% from the previous year, amounting to $92 billion. This marks the first decline in interest payments since October.