U.S. Budget Deficit Drops Amid Calendar Shifts and Tariff Refunds

The U.S. budget deficit for May fell by 7% to $293 billion due to calendar shifts in payments and refunds from Trump's tariffs. Customs duty refunds totaled $21.97 billion with net customs outflows of $42 million. The fiscal year deficit is $1.246 trillion, down by 9%.

The U.S. budget deficit experienced a decline in May, dropping by 7% to $293 billion, according to the latest report from the Treasury Department. This decrease is largely attributed to prior-year calendar shifts and significant refunds from President Donald Trump's emergency tariffs.

The Treasury revealed that customs duty refunds amounted to $21.97 billion against gross customs collections of $21.93 billion, resulting in net customs outflows of $42 million for the month. Additionally, the U.S. Customs and Border Protection agency started refunding about $166 billion in tariffs that were declared illegal by the U.S. Supreme Court earlier this year.

Despite these changes, the adjusted deficit for May increased by 32% to $293 billion when accounting for calendar shifts. Over the first eight months of the fiscal year 2026, the total deficit was $1.246 trillion, marking a 9% decline compared to the previous year.