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Tariff Refunds Turn June Surplus Into $120 Billion Budget Deficit

Repayments of tariff collections caused a net customs outflow that pushed June's budget into deficit, with higher interest payments plus a calendar shift in benefit payouts worsening the shortfall.

Overview

  • The Treasury reported gross customs collections of $23.6 billion and refunds of $49.2 billion, producing a net customs outflow of $25.6 billion that was the main driver of June's $120 billion deficit.
  • Total federal receipts fell by $31 billion to $496 billion for the month while outlays rose to $616 billion, a $117 billion increase that was partly exaggerated by a $97 billion calendar-driven reduction in June 2025 spending.
  • On an adjusted basis that accounts for the timing shift, the June deficit widened by $53 billion, a 79% rise from the prior-year adjusted deficit of $67 billion.
  • Gross interest costs on public debt jumped to $185 billion in June, with federal trust funds receiving $70 billion in interest that offset only part of the increase.
  • For the fiscal year to date the deficit increased $29 billion to $1.367 trillion as receipts rose slightly and outlays grew by $172 billion, a trend analysts say could weigh on markets while refund payments are processed.