The U.S. deficit is expected to break above $2 trillion for the current fiscal year, despite record $350B in tariff revenue.   The U.S. deficit is expected to top $2 trillion in the current fiscal year. This is interesting because it comes even as the government collects a record $350 billion annually in tariffs.  August, […] The post US Deficit to Surpass $2 Trillion Despite Record Tariff Revenue appeared first on Live Bitcoin News.The U.S. deficit is expected to break above $2 trillion for the current fiscal year, despite record $350B in tariff revenue.   The U.S. deficit is expected to top $2 trillion in the current fiscal year. This is interesting because it comes even as the government collects a record $350 billion annually in tariffs.  August, […] The post US Deficit to Surpass $2 Trillion Despite Record Tariff Revenue appeared first on Live Bitcoin News.

US Deficit to Surpass $2 Trillion Despite Record Tariff Revenue

2025/09/23 15:00

The U.S. deficit is expected to break above $2 trillion for the current fiscal year, despite record $350B in tariff revenue.

 

The U.S. deficit is expected to top $2 trillion in the current fiscal year. This is interesting because it comes even as the government collects a record $350 billion annually in tariffs. 

August, especially, showed this imbalance.

The government posted a $345 billion monthly deficit while tariff revenue hit $31 billion, its highest single-month total in history.

Tariffs covered less than 10% of that month’s shortfall. Every month this year has seen over $300 billion in new deficit spending. This means that if the trend continues, the next fiscal year could see a deficit near $2.7 trillion.

Tariffs Reach 90-Year Highs but Cannot Close the Gap.

Tariff revenue has risen 355% since last year, and has reached levels not seen since the 1930s. This means that annual collections now represent 18% of household income taxes. 

For decades, that figure hovered near 4% and rarely went higher than 10%.

The current effective tariff rate sits at 17.3%, and is the highest since 1935. Despite trade negotiations, tariffs have not gone away. Even paused measures, like the U.S.-China tariffs, have not reduced overall intake. 

As it stands, the White House is now weighing an extension of existing agreements.

Still, the surge in revenue has not reduced the deficit. Government spending continues to grow faster than income, and is leaving tariff collections as a small fraction of total needs.

Market Response to Rising Deficits

Despite the worsening fiscal numbers, equity markets have shown strength. The S&P 500 has added $16 trillion in value since April and set nearly 30 all-time highs this year. 

Analysts at Carson Group note this is the sixth time since 1975 that the index gained more than 30% over five months. Historically, such streaks have led to an average 18% gain the following year.

Investors initially reacted negatively to higher tariffs. 

Early this year, the S&P 500 fell 10% in its first 73 trading days as traders priced in shocks. That caution has faded so far, and markets now appear focused on artificial intelligence growth, expected Federal Reserve rate cuts and corporate earnings strength.

Effects Beyond Federal Budgets

Trump’s tariff policies have rippled through markets for equities, commodities, and crypto. The immediate reaction in stocks was negative, but later stabilisation showed investor confidence in broader economic drivers.

In digital assets, fiscal uncertainty has pushed some investors to seek alternatives. Cryptocurrencies have benefited so far, as traders look for assets not directly tied to government spending or policy outcomes.

Historical Perspective on Tariffs

For most of modern history, tariffs accounted for a small share of U.S. income. Before now, they averaged 4% of household tax receipts and rarely reached double digits. The last time the U.S. saw comparable levels was during the Great Depression.

However, the ongoing Trump tariff regime stands as a strong change from decades of relatively open trade. 

In all, by raising rates to near-Depression levels, the policy has reshaped trade flows and increased government revenue. Yet it has not fixed the structural gap between spending and income.

In a nutshell, unless spending slows down, tariff revenue will continue to be a small offset against much larger deficits. 

Investors and policymakers will all be watching whether the U.S. takes steps toward greater fiscal balance or continues down the path of rising red ink.

The post US Deficit to Surpass $2 Trillion Despite Record Tariff Revenue appeared first on Live Bitcoin News.

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.
Share Insights

You May Also Like

Best Crypto to Buy as Saylor & Crypto Execs Meet in US Treasury Council

Best Crypto to Buy as Saylor & Crypto Execs Meet in US Treasury Council

The post Best Crypto to Buy as Saylor & Crypto Execs Meet in US Treasury Council appeared on BitcoinEthereumNews.com. Michael Saylor and a group of crypto executives met in Washington, D.C. yesterday to push for the Strategic Bitcoin Reserve Bill (the BITCOIN Act), which would see the U.S. acquire up to 1M $BTC over five years. With Bitcoin being positioned yet again as a cornerstone of national monetary policy, many investors are turning their eyes to projects that lean into this narrative – altcoins, meme coins, and presales that could ride on the same wave. Read on for three of the best crypto projects that seem especially well‐suited to benefit from this macro shift:  Bitcoin Hyper, Best Wallet Token, and Remittix. These projects stand out for having a strong use case and high adoption potential, especially given the push for a U.S. Bitcoin reserve.   Why the Bitcoin Reserve Bill Matters for Crypto Markets The strategic Bitcoin Reserve Bill could mark a turning point for the U.S. approach to digital assets. The proposal would see America build a long-term Bitcoin reserve by acquiring up to one million $BTC over five years. To make this happen, lawmakers are exploring creative funding methods such as revaluing old gold certificates. The plan also leans on confiscated Bitcoin already held by the government, worth an estimated $15–20B. This isn’t just a headline for policy wonks. It signals that Bitcoin is moving from the margins into the core of financial strategy. Industry figures like Michael Saylor, Senator Cynthia Lummis, and Marathon Digital’s Fred Thiel are all backing the bill. They see Bitcoin not just as an investment, but as a hedge against systemic risks. For the wider crypto market, this opens the door for projects tied to Bitcoin and the infrastructure that supports it. 1. Bitcoin Hyper ($HYPER) – Turning Bitcoin Into More Than Just Digital Gold The U.S. may soon treat Bitcoin as…
Share
BitcoinEthereumNews2025/09/18 00:27
Share