Tariff refunds push U.S. June budget deficit to $120 billion

The United States government recorded a $120 billion budget deficit in June, a figure significantly impacted by substantial refunds of previously collected tariffs. This development stems from court decisions that declared former President Donald Trump's tariff policies unlawful, compelling the government to return the collected duties.

According to data from the U.S. Treasury Department, while customs collected $23.6 billion in tariffs in June, the government simultaneously issued $49.2 billion in refunds. This resulted in a net outflow of $25.6 billion from tariff revenue for the month. The U.S. Supreme Court ruled in February that certain global tariffs imposed under the International Emergency Economic Powers Act were illegal, leading to the refund process beginning in May.

So far, approximately $71 billion in refunds have been processed for May and June, representing 42% of the total eligible $166 billion in tariff revenue. This situation starkly contrasts with June 2025, a period when Trump's tariff policies were in full effect, generating $26.6 billion in net tariff revenue and pushing annual tariff income past $100 billion for the first time that year.

U.S. trade policy continues to face uncertainty. The current 10% temporary global tariff is set to expire on July 24, and the government is reportedly considering new tariff measures targeting countries that fail to enforce regulations against forced labor or that engage in overcapacity. A federal judge has warned that the government's appeals against refund orders are delaying the process, though the Treasury Department has not commented on future refund timelines.