JUST IN: Trump’s Tariff Strategy Drives First Budget Surplus In Decades

For the first time since 2005, the U.S. government has recorded a monthly budget surplus, and it’s coming on the heels of President Trump’s aggressive trade and tariff agenda.

According to new data released Friday by the U.S. Treasury Department, the government posted a $27 billion surplus for the month of June, a sharp reversal from May’s staggering $316 billion deficit. The turnaround, while temporary, is a significant signal for Trump’s economic team as they argue that tariffs and strong fiscal policy are starting to pay dividends.

The last time the government saw a June surplus was in 2017 — during Trump’s first term. The latest marks a return to form under his leadership, with tariff revenue and disciplined spending touted as key factors in the monthly windfall.

While the federal deficit for the fiscal year still stands at $1.34 trillion, the recent improvement shows a narrowing gap that may continue in the months ahead. When adjusting for the calendar, the year-to-date deficit actually edged slightly lower compared to this point last year.

Receipts in June jumped 13% compared to the same month in 2024, while federal outlays declined by 7%, according to the Treasury report. Year-to-date, government revenue has climbed 7%, while spending is up 6%. A notable portion of that revenue bump comes from tariffs — a cornerstone of Trump’s economic reset.

In April, Trump reinstated broad 10% tariffs on imports, alongside a package of targeted “reciprocal” tariffs aimed at nations with imbalanced trade policies. The move was initially met with skepticism by critics and foreign allies, but the results are now hard to ignore.

Per CNBC customs duties brought in approximately $27 billion in June alone — a 301% increase over the same month in 2024 and $4 billion more than in May. Over the course of the fiscal year so far, tariff collections have totaled $113 billion, representing an 86% surge year-over-year.

The surplus also benefited from calendar quirks, which shifted some payments into June. Without that adjustment, the Treasury noted, the government would have run a $70 billion deficit. Still, even with adjustments considered, the spike in revenue remains largely driven by Trump’s trade actions.

Despite the surplus, structural challenges remain. Net interest payments on the $36 trillion national debt hit $84 billion in June — second only to Social Security in government spending categories. For the year, interest payments have reached $749 billion, with a projected total of $1.2 trillion by the fiscal year’s end.

Trump has repeatedly urged the Federal Reserve to lower short-term borrowing costs to ease debt servicing pressures. However, Fed Chair Jerome Powell has so far resisted, expressing his concern over inflation risks tied to tariffs.

Historically, tariffs were once the primary revenue stream for the federal government prior to the creation of the income tax in 1913. Trump has drawn inspiration from this model, reviving protectionist policies reminiscent of the Gilded Age. His approach parallels that of President William McKinley, who championed high tariffs in the late 19th century.

However, economists often caution against going too far, citing the Smoot–Hawley Tariff Act of 1930, which helped trigger a global trade collapse during the Great Depression. Nonetheless, Trump’s economic team maintains that tariffs today are less about isolationism and more about leverage—using them as a negotiating tool to bring trading partners to the table and level the playing field.