Historic High in Tariff Revenue

The United States has achieved an unprecedented milestone in tariff revenue for June, with figures soaring to $27.2 billion, marking a nearly fourfold increase compared to the same period last year. This remarkable growth has propelled the share of tariffs in federal tax receipts from 2% to 5% in just four months.

Containers sit at the Port of Los Angeles, in San Pedro, California, U.S., July 8, 2025. REUTERS

Economic Implications and Market Reactions

The surge in customs revenues has contributed to a record high in total federal receipts for June, reaching $526 billion, a 13% increase from the previous year. Concurrently, expenditures decreased by 7% to $499 billion, resulting in a $27 billion budget surplus. Treasury Secretary Scott Bessent highlighted the success of President Trump's trade policies, stating, "As President Trump fights to restore economic sovereignty, tariff revenues have reached unprecedented levels," and noted the absence of inflation.

Dollar's Resilience Amid Trade Wars

Despite initial concerns over the impact of reciprocal tariffs on the U.S. dollar, the currency has shown signs of recovery in July. The U.S. dollar index and Bloomberg’s dollar spot index have both experienced significant gains, suggesting a shift in market perception towards the effectiveness of Trump's trade policies. Gang Hu of WinShore Capital Management observed, "the market thinks the U.S. is winning the trade war."

Underlying Concerns: Inflation and Treasury Yields

However, experts caution that the dollar's strength may be more attributed to growing inflation fears rather than a clear victory in trade policy. The U.S. treasury bond market reflects these concerns, with yields climbing and a "bear steepening" phenomenon emerging, indicating heightened inflation worries.