Tariff-related customs revenue surged in January as the federal budget deficit narrowed, a Treasury Department update showed, while the Supreme Court continued to weigh a legal challenge that could determine whether the Trump administration can keep the money or must refund it.
The Department of the Treasury reported the government ran a roughly $95 billion deficit in January, down about 26% from a year earlier, as revenue gains outpaced spending growth.
For the fiscal year that began Oct. 1, the cumulative deficit narrowed to $697 billion, down 17% from the same period of fiscal 2025.
A major driver was customs revenue tied to tariffs.
Reuters, citing Treasury data, reported net customs duties of $27.7 billion in January, up from $7.3 billion a year earlier, with year-to-date net customs duties at $117.7 billion.
The budget picture still shows heavy pressure from borrowing costs.
Debt interest remained at a record $426 billion for the fiscal year to date, even after an unusual decline in interest payments in January.
As of Jan. 7, the gross national debt was $38.43 trillion, according to the Senate Joint Economic Committee's debt dashboard.
The stakes for the tariff revenue may hinge on the Supreme Court's consolidated cases, Learning Resources v. Trump and Trump v. V.O.S. Selections, which challenge President Donald Trump's use of the International Emergency Economic Powers Act, or IEEPA, to impose sweeping tariffs.
The court heard arguments on Nov. 5, and had not issued a decision as of Feb. 11.
Both parties and their allies have tried to shape expectations for where the court may land, largely through friend-of-the-court briefs and related political pressure.
Senate Democrats led by Jeanne Shaheen of New Hampshire and Ron Wyden of Oregon backed a bipartisan, bicameral amicus brief arguing that Congress, not the president, holds tariff power and that IEEPA does not authorize tariffs.
Republican-aligned groups and some GOP lawmakers have urged the court to uphold the tariffs or avoid a ruling that curtails presidential emergency authority, and the Trump administration has defended the measures as authorized by IEEPA.
Court filings show amicus briefs supporting the Trump administration from Rep. Darrell Issa, R-Calif., the America First Policy Institute, and other pro-administration groups.
On Capitol Hill, the tariff debate has also split Republicans, even as Democrats press for votes to roll back some tariffs.
The House on Feb. 10 rejected a Republican-led measure that would have blocked legislative challenges to Trump's tariffs, after three Republicans joined Democrats in opposition.
Reuters contributed to this report.
Jim Thomas ✉
Jim Thomas is a writer based in Indiana. He holds a bachelor's degree in Political Science, a law degree from U.I.C. Law School, and has practiced law for more than 20 years.
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