US Budget Surplus Surges to $258 Billion in April, Year-to-Date Deficit Tops $1 Trillion

Reuters

11:49 JST, May 13, 2025

May 12 (Reuters) – The U.S. government posted a $258 billion budget surplus for April, up 23%, or about $49 billion, from a year earlier, reflecting strong tax receipts in the final month of the tax season and record collections of import duties, the Treasury Department said on Monday.

Treasury reported that customs duties in April totaled $16 billion, about a $9 billion increase from the year-earlier period and far eclipsing the previous record of $9.6 billion two years earlier. The jump occurred during a month in which President Donald Trump boosted tariffs on Chinese goods to as much as 145% while slapping at least 10% levies on imports of goods from other countries.

The budget results indicate the U.S. collected just over $500 million a day from tariffs in April. Trump last month said the collections were about $2 billion a day.

For the first seven months of the fiscal year, net customs duties totaled $63 billion, compared with $48 billion in the same period a year earlier.

That new revenue, however, is likely to drop off. The U.S. and China over the weekend reached a deal to temporarily ease their steep tariffs on each other, with the U.S. cutting its 145% duties to 30% for the next 90 days, while Chinese levies on U.S. imports will fall to 10% from 125%.

Receipts last month were driven by a 16% increase in individual non-withheld tax payments, which totaled $460 billion. Individual refunds also rose 16% to $86 billion, detracting from net total budget receipts of $850 billion for the month.

Treasury reported a $1.049 trillion budget deficit for the first seven months of fiscal 2025, which started Oct. 1, up 23%, or $194 billion, from a year earlier. Fiscal year-to-date receipts of $3.110 trillion and outlays of $4.159 trillion were both records for the year through April, though the deficit itself was not, a Treasury official said.

After accounting for calendar differences that exaggerated outlays recorded in 2024 and $85 billion in deferred tax receipts from California that had boosted fiscal-year 2024 receipts, the deficit would have been 4% higher, according to the official.

The 5% increase in unadjusted fiscal year-to-date receipts was driven by a 6% increase in individual paycheck tax withholdings to $2.145 trillion, accounting for the lion’s share of the total budget receipts.

The 9% increase in unadjusted fiscal-year-to-date outlays was driven by higher spending on the Medicare health program for seniors and the disabled, which was up 16% to $658 billion, and on the Medicaid program for lower-income Americans, which was up 6% to $378 billion. Both programs saw enrollment climb and service costs rise.

Spending on the Social Security retirement program rose 9% to $945 billion on a fiscal-year basis, while payments to cover Treasury debt interest climbed 10% from a year earlier to $684 billion.

The Treasury official said the weighted average interest rate for the month was 3.29%, up 6 basis points from a year earlier, but close to where it has been for the past five months.