US June budget deficit hits $120 billion amid tariff refunds

A massive wave of federal refund payments for import tariffs recently declared illegal by the Supreme Court has pushed the U.S. federal budget deficit for June 2026 to $120 billion.

A budget deficit occurs when government spending exceeds government income.

While tariff refunds are payments the government makes back to businesses or importers when tariffs are reduced, overturned by a court, or found to have been collected incorrectly.

These refunds increase government spending, which can widen the budget deficit.

The latest monthly U.S. Treasury Department statement revealed on Monday showed that the growing refunds pushed the June federal budget deficit, marking a sharp turnaround from the $27 billion surplus in June 2025 that was due, partly to its imposition of the import duties.

It comes as the Treasury reported gross customs duty collections of $23.6 billion but refunds of $49.2 billion, resulting in a net outflow of $25.6 billion for the month.

As reported, the total June receipts declined by $31 billion, or 6%, to $496 billion were compared to the year-earlier period.

Outlays for June were $616 billion, up $117 billion, or 23%, from the reported June 2025 total.

But the Treasury said that June 2025 outlays were reduced by $97 billion due to calendar shifts ‌in benefit payments.

On an adjusted basis, the June deficit was up $53 billion, or 79%, from the prior-year adjusted deficit of $67 billion.

While the Treasury's gross interest outlays for public debt in June rose $41 billion, or 28%, to $185 billion, but this figure was partially offset by a $10 billion, or 17%, increase in interest received by federal trust funds to $70 billion.

For the fiscal year to date, the deficit rose $29 billion, or 2%, to $1.367 trillion.

Receipts for that period were up $143 billion, or 4%, to $4.151 trillion, while outlays rose $172 billion, or 3%, to $5.518 trillion.