U.S. Budget Gap Balloons to $739 Billion Despite Tariff Revenue
- The U.S. budget deficit widened to US$738.6Bn in the first eight months of the fiscal year, a US$206Bn increase from a year earlier, despite a revenue boost from President Donald Trump’s tariffs on imported merchandise.
- The shortfall was 38.8% more than the same period a year ago, the Treasury Department said in its monthly budget review released on Wednesday. So far in the fiscal year that began Oct. 1, a revenue increase of 2.3% hasn’t kept pace with a 9.3% rise in spending.
- As Trump ratcheted up the trade war with China with higher levies on imports from the Asian nation, the U.S. recorded US$4.9Bn in customs duties in May, bringing the total to US$44.9Bn in the first eight months of the fiscal year – almost double the same period a year earlier. Trump has repeatedly boasted that the U.S. is taking in billions in dollars through the tariffs, though importers in America are actually paying the levies.
- The deficit is forecast to reach $897 billion this fiscal year, from US$779Bn last year, and rise to more than US$1Tn in fiscal 2022, according to the Congressional Budget Office. In May, the fiscal deficit increased to US$207.8Bn, up 41.5% from the same month last year. The forecast in a Bloomberg survey of economists was US$202.5Bn.