A cargo ship loads and unloads foreign trade containers at Qingdao Port in Qingdao City, Shandong Province, China, January 13, 2026.
Photo | Future Publishing | Getty Images
Although the U.S. government’s budget deficit was smaller in January than it was a year ago, tariff collections soared, a reminder of how crucial the long-awaited Supreme Court decision is to the health of the federal finances.
Customs duties collected through customs duties totaled $30 billion in the month, bringing the fiscal year to date to $124 billion, an increase of 304% compared to the same period in 2025.
In April 2025, President Donald Trump imposed flat tariffs on all goods and services imported into the United States, as well as imposing a menu of so-called reciprocal tariffs on countries for the first time. Since then, the White House has been negotiating with trading partners, withdrawing some of the more aggressive charges while continuing to hold tough talks on the issue.
Last November, the Supreme Court heard oral arguments challenging President Trump’s patronage that justified the tariffs. A decision was expected in January. The high court has not yet ruled, and the White House is concerned that a negative ruling could force the United States to repay the tariffs it has collected so far.
Tariffs helped slow the pace of budget deficits.
The shortfall in the fourth month of the fiscal year totaled about $95 billion, a decrease of about 26% from the same period last year, the Treasury Department reported.
Year-to-date, the federal deficit is $697 billion, down 17% from the same period in fiscal 2025, according to non-calendar adjusted numbers. Due to the calendar adjustment, the deficit reduction rate will be 21%.
Interest on the $38.6 trillion US debt continues to burden the nation’s finances. Total net interest expense for the month was $76 billion, more than all other spending except Medicare, Social Security, and health care. Year-to-date total interest totaled $426.5 billion, up from $392.2 billion a year ago.
