The U.S. Treasury Department on Monday reported a $120 billion federal budget deficit for June after refunding $49.2 billion in tariffs that were later ruled unlawful, marking a sharp reversal from the $27 billion surplus recorded in June 2025.
Tariffs are taxes imposed on imported goods. The June deficit was driven largely by refunds issued after the U.S. Supreme Court struck down President Donald Trump‘s emergency tariffs imposed under the International Emergency Economic Powers Act (IEEPA), according to Reuters.
Refunds Outpace Collections
The Treasury collected $23.6 billion in customs duties during June but refunded $49.2 billion, resulting in a net customs outflow of $25.6 billion for the month. The refunds were more than double the roughly $22 billion returned in May.
The refunds also reduced total June government receipts by $31 billion, or 6%, to $496 billion, while federal outlays reached $616 billion. On an adjusted basis, the June deficit rose 79% from a year earlier.
