The U.S. budget deficit surged nearly 20% in July to $291 billion despite a significant increase in customs duty collections from President Donald Trump’s tariffs, as government spending outpaced revenue growth.

According to the Treasury Department, total receipts increased by 2% to $338 billion, while government outlays soared 10% to a record $630 billion for the month.

Adjusting for fewer business days in July compared to last year, receipts would have been about $20 billion higher. Customs duties alone rose sharply to approximately $27.7 billion from $7.1 billion the previous July, reflecting the impact of Trump’s tariff policies.

Although tariffs have boosted federal revenue, the additional costs often trickle down to consumers through higher prices.

Consumer price data revealed price hikes in tariff-sensitive items such as furniture, footwear, and auto parts, partially offset by falling gasoline prices.

For the first 10 months of the fiscal year, customs duties totalled $135.7 billion, up 116% from the previous year.

Meanwhile, the year-to-date budget deficit expanded by 7% to $1.629 trillion, with record-high receipts of $4.347 trillion and outlays of $5.975 trillion.

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