Tariff-Driven Revenues Narrow U.S. Q4 2025 Deficit by 15%

Overview

• The federal deficit fell to $602 billion in the fourth quarter of 2025 from $711 billion a year earlier, a 15% decline.
• Total receipts rose 13% to a record $1.2 trillion while outlays increased 2% to a record $1.8 trillion, according to a senior Treasury official.
• Customs-duty revenue surged from $23 billion to $94 billion, which the Treasury attributed mainly to higher tariff rates.
• December 2025 recorded a $145 billion monthly deficit, up 67% year over year, reflecting record spending distorted by timing effects.
• Roughly $32 billion in January 2026 benefit payments were processed in December, and analysts report signs that tariff revenue growth may be plateauing.