US earns well on Trump's tariffs; country's custom revenues cross $100 bn

Increased customs revenue produced a surplus budget for America in June

President Donald Trump’s “reciprocal tariffs” upturned the world trade system but earned the US more than $64 billion in customs revenue in the second quarter of calendar year 2025 (Q2 CY25), up 260 per cent from the previous year.

 

Data from the Department of the Treasury shows that the tariffs have allowed the US government to earn more than $108 billion from customs duties alone in the first nine months of fiscal year 2025 (October to September). It had never before exceeded $100 billion in any of the earlier full fiscal years. Moreover, increased customs revenue produced a surplus budget for the US in June. Customs duty receipts that month were the fourth largest contributor to the US government receipts after individual income taxes, social insurance and retirement receipts, and corporate income taxes. 

 

In April 2015, when Barack Obama was the President, the US earned $3.43 billion in customs. The amount accounted for a minuscule 0.73 per cent share in the total receipts of the US government. The share changed marginally to 1.2 per cent and 0.86 per cent, respectively. in May and June 2015. Broadly, the share has remained between 1-2 per cent in the last 10 years, occasionally breaching the 3 per cent mark.

 

In April 2025, three months after Trump started his second term as President, the share of customs revenue in total US government receipts was 1.84 per cent. In May and June, such revenue grew to 5.97 per cent and 5.06 per cent of total receipts, the highest in 10 years. 

 

The share of goods imported from China and Canada out of total imports by the US has reduced from 21.82 per cent and 13.5 per cent in Q1 CY15 to 8.86 per cent and 10.45 per cent in Q2 CY25, respectively. Chinese and Canadian imports to the US shrunk 29.58 per cent and 14.08 per cent in Q2 CY25 (excluding June) from the previous year. The two countries have levied counter-tariffs on US imports.

 

However, imports from Mexico, the European Union and India to the US have increased 4.10 per cent, 7.19 per cent and 20.82 per cent in Q2 CY25 (excluding June) from the previous year. India’s share in the US goods imports has grown from 1.98 per cent in Q1 CY15 to 3.25 per cent in April and May of 2025. 

 

According to an analysis by The Budget Lab at Yale, the effective tariff rate the US levied in 2015 was 1.53 per cent. It doubled to 3.01 per cent in 2022 and then dropped down to 2.42 per cent in 2024. However, in Trump’s second term, the average effective tariff rate has reached 20.62 per cent (without considering any changes in purchase or consumption patterns after the tariffs have been operationalised), the highest since 1910. 

 

The US has gained profusely from Trump’s tariffs, but it would be interesting to see whether such a policy can work in the long run to “make America great again”.