US tariff income fell by nearly $3 billion between November and December

US Tariff Revenues Decline as Trade Policies Shift

According to a recent US Treasury report, the government collected $27.89 billion in tariff revenue during December, concluding a year marked by significant changes to American trade policy under President Trump.

With this latest figure, the total tariff revenue for 2025 reached $264.05 billion—a record-setting annual sum. However, this also represents the second consecutive month of declining revenue, following reductions in key tariffs announced by Trump in November.

October saw the highest monthly revenue of the year at $31.35 billion, but November brought the first decrease, with $30.76 billion in customs duties collected. December’s numbers reflect a drop of over 10% from the October peak, highlighting the impact of tariffs on both global trade patterns and the volume of goods entering the US.

Newly released Commerce Department data also revealed that the US trade deficit narrowed in November to $29.4 billion, the lowest since mid-2009—a report delayed by last year’s government shutdown.

These shifts are largely attributed to President Trump’s extensive tariff initiatives, which disrupted importers and led to a notable decrease in trade activity at US ports.

Read more: How Trump's tariffs affect your money

In many respects, these developments align with the promises Trump made upon taking office, and he has been quick to claim credit for the results.

Treasury Secretary Scott Bessent recently stated on Fox News, “Our trade deficit shrank. We're back down to 2009 levels, thanks to the president's trade agenda.”

When the new tariff measures were introduced earlier this year, monthly revenues surged from $7.25 billion in February, increasing steadily through October.

The Treasury’s latest update also indicated a nearly $3 billion decrease in tariff revenue from November to December.

This downward trend was anticipated, especially after the Congressional Budget Office revised its forecast for tariff income over the next decade, reducing it by $1 trillion.

Shifting Trade Dynamics

The recent drop in tariff collections has implications for Trump’s broader policy goals, which have often emphasized historically high revenue figures.

The president has suggested that tariff income could fund a wide range of initiatives—far exceeding the actual amounts generated, even at their highest levels.

Most recently, Trump proposed a $500 billion increase in the US military budget, attributing the possibility to tariff revenues. This proposed increase is more than double the total tariff revenue collected in 2025.

Ongoing Uncertainty and Global Trade Developments

Looking ahead to 2026, uncertainty around tariffs and trade policy continues. This week, Trump threatened to impose 25% tariffs on goods from any country conducting business with Iran. Additionally, a highly anticipated Supreme Court decision regarding Trump’s broad tariff measures could be announced as soon as Wednesday.

Read more: Find out how the Supreme Court rules on Trump's tariffs

The recent trade deficit figures reflect a reduction in US trade activity. A January analysis by Project44, a shipping data firm, highlighted that in 2025, US imports from China dropped by 28%, while exports to China fell by 38%.

The report noted some stabilization in shipping volumes, but at a much lower level, describing the tariff-driven shift as “one of the most significant bilateral trade contractions in recent memory.”

However, these changes in US trade flows may not be mirrored globally. Last week, the European Union approved a major trade agreement with Mercosur, a bloc of four large Latin American countries. This partnership is expected to establish one of the world’s largest free-trade zones, reducing trade barriers for over 700 million people.

Ben Werschkul reports from Washington for Yahoo Finance.