Here’s the real story behind the $27 billion budget surplus in June

Here’s the real story behind the $27 billion budget surplus in June—and spoiler: it’s not just Trump’s tariffs doing the heavy lifting.

Lots of folks have been tweeting that the tariffs caused the surplus since Customs Duties (aka tariff revenue) hit $27 billion that month. On the surface, that lines up.

But hold up:

Tariffs are only about 5% of total federal receipts — a small slice of the pie.

Comparing June 2024 to June 2025, tariffs increased by roughly $19 billion.

Income tax receipts, meanwhile, jumped by around $50 billion — more than double the tariff increase.

Meanwhile, spending on education dropped dramatically—by about $79 billion—which is about four times the size of the tariff revenue increase.

Other spending categories rose slightly, but none near that education cut.

So, what really drove the surplus?

The big dip in education spending

A solid bump in income tax collections

The tariffs helped, sure, but they weren’t the main star of the show.

Historical context:

It’s unusual for June to see a surplus. The last time we had one was 2016, and the last bigger one was 2015.

Overall, the biggest recent factor in improving the budget situation is cutbacks in spending, not massive revenue spikes.

Bottom line: tariffs contributed, but the education spending cuts and income tax increases made the biggest difference. So no, tariffs didn’t single-handedly create that $27 billion surplus. They just got some credit they don’t fully deserve.

Thanks for sticking with the deep dive!