Despite record customs revenue from tariffs, the US July budget deficit rose 20% this fiscal year, reaching $21 billion. Increased spending on interest payments and social security, among other factors, outweighs tariff income. Economists disagree on the long-term impact of tariffs on the deficit, with some predicting modest reductions while others express skepticism. The Trump administration aims to reduce the deficit through further trade deals, but the actual effect remains uncertain.

Prepared by Christopher Adams and reviewed by editorial team.