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RNZ News
an hour ago
- RNZ News
US customs duties top $100 billion for first year
By David Lawder , Reuters Shipping containers are stacked on container ships at the Port of Los Angeles on 25 June, 2025, in Los Angeles, California. Photo: AFP/ Getty Images - Mario Tama MARIO TAMA US customs duty collections surged again in June, as US president Donald Trump's tariffs gained steam, topping $US100 billion for the first time during a fiscal year and helping produce a surprise $27b budget surplus for the month, the Treasury Department has reported. The budget data showed that tariffs were starting to build into a significant revenue contributor for the federal government, with customs duties in June hitting new records, quadrupling to $27.2b on a gross basis and $26.6b on a net basis, after refunds. The budget results are likely to reinforce Trump's view of tariffs as a lucrative revenue source and as a hammer to enforce non-trade foreign policy. On Tuesday, he said "the big money" would start to flow in, after he imposes higher "reciprocal" tariffs on US trading partners on 1 August. US Treasury Secretary Scott Bessent said on X that the results showed the US "reaping the rewards" from Trump's tariff agenda. "As President Trump works hard to take back our nation's economic sovereignty, today's Monthly Treasury Statement is demonstrating record customs duties - and with no inflation!" Bessent said. Another promise made. Another promise kept. Our nation is reaping the rewards from @POTUS 's America First agenda. As President Trump works hard to take back our nation's economic sovereignty, today's Monthly Treasury Statement is demonstrating record customs duties – and with… For the first nine months of fiscal 2025, the customs take reached records of $113.3b on a gross basis and $108b on a net basis, nearly double the prior-year collections. The US government's fiscal year ends on 30 September. Based on those results, tariffs have now grown into the fourth-largest revenue source for the federal government, behind individual withheld receipts at $2.683 trillion for the fiscal year, non-withheld individual receipts at $965b and corporate taxes at $392b. In the space of roughly four months, tariffs - as a share of federal revenue - have more than doubled to about five percent from about two percent historically. The June budget surplus represented a turnaround from the $71b deficit in June 2024. The new tariff-related revenue helped boost total budget receipts last month by 13 percent - or $60b - to $526b, a record for that month, the US Treasury said. Outlays in June fell seven percent - or $38b - to $499b. Adjusting for calendar shifts of some revenue and benefit payments, it said there would have been a budget deficit of $70b in June, along with a year-ago adjusted deficit of $143b. The overall year-to-date deficit, however, increased five percent - or $64b - to $1.337 trillion, as outlays rose for healthcare programmes, Social security retirement benefits, defence spending, debt interest and the Department of Homeland Security, the US Treasury said. Receipts for the first nine months of the fiscal year rose seven percent - or $254b - to a record $4.008t, driven in part by withheld taxes from higher employment and wages, while outlays grew six percent - or $318b - to a record $5.346t. The Treasury's interest costs on the national debt continued to grow, exceeding all other individual outlays at $921b for the first nine months of the fiscal year, up six percent - or $53b - from the year-ago period, but the Treasury's weighted average interest rate largely had stabilised at 3.3 percent at the end of June, up two basis points from a year ago, a Treasury official said. Earlier this week, Bessent suggested a steeper ramp-up in tariff collections, telling a cabinet meeting that calendar-year 2025 collections could grow to $300b by the end of December. At the June run rate, gross customs collections would hit $276.5b in six months, which means reaching Bessent's target would require some increases. Ernie Tedeschi, economics director of the Budget Lab at Yale University, said it may take more time for the tariff revenue to fully ramp up, because businesses and consumers have sought to front run the duties by buying ahead. Once that effect fades and Trump implements higher "reciprocal tariff" rates after a 1 August deadline, the Treasury may collect an extra $10b in tariffs per month, bringing the total to $37b, he said. "I think there's a significant risk... that we get addicted to tariff revenue," said Tedeschi, who served as a White House economic adviser during the Biden administration. He added that tariff income could fade over time, as businesses and consumers adjust their behaviour. This week, Trump has ratcheted up his tariff actions, announcing 50 percent levies on copper imports and goods from Brazil and a 35 percent tariff on Canadian goods , all due to start on 1 August. The Trump administration is preparing more sector-based tariffs on semiconductors and pharmaceuticals. - Reuters
RNZ News
11 hours ago
- RNZ News
Stock markets retreat as Trump ramps up trade-offensive
US President Donald Trump holds a chart titled 'Reciprocal Tariffs' during an event at the White House in April. Photo: AFP / Brendan Smialowski European and US stock markets retreated Friday as US President Donald Trump ramped up his trade offensive, threatening a 35-percent levy on Canada . Trump dampened earlier optimism by firing off more than 20 letters to governments outlining new tariffs if agreements are not reached by 1 August. Bitcoin meanwhile pushed on with its climb, reaching an all-time high above US$118,000. The dollar was higher against its main rivals, and oil prices gained. Wall Street's three main indices fell, with both the S&P 500 and Nasdaq retreating from records. But the pullback was relatively modest, implying that many investors are taking a wait-and-see approach to Trump's latest tariff broadsides. "We have yet to see new substantial tariffs actually be enforced," said Adam Sarhan of 50 Park Investments, describing investors as skeptical the biggest levies will actually be enacted. A note from Oxford Economics characterised Trump's moves as "more tariff theatrics", while allowing that the levy on Canada produced "jitters". In Europe, where investors were awaiting news of Trump's new tariff level targeting the European Union, the Paris stock market dropped 0.9 percent and Frankfurt 0.8 percent. "The fallout hasn't been more pronounced because the market still continues to view all of this as a point of negotiating leverage," said analyst Patrick O'Hare of Trump dialled up his trade war rhetoric Thursday, warning that Canada faced a 35-percent tax, while other countries would be handed blanket tariffs of up to 20 percent, from the current 10 percent. That came after he outlined plans to impose 50-percent tariffs on copper imports, while threatening 200-percent levies on pharmaceuticals, and hit Brazil with a new 50-percent charge. The moves are the latest by the White House in a campaign it said was aimed at ending decades of the United States being "ripped off". Trump's initial bombshell tariffs announcement in April sent markets into turmoil until he paused them for three months, and the latest measures have had less impact. London's FTSE 100 and the pound retreated after data showed the UK economy unexpectedly shrank in May - its second consecutive monthly decline. That followed a mixed session in Asia, where Hong Kong rose, Tokyo fell and Shanghai flattened by the close. Shares in BP jumped 3.4 percent in London after the energy giant said it expected to report higher oil and gas production for its second quarter. Levi Strauss & Co. shot up 11.3 percent after reporting higher profits on a 6.4 percent rise in revenues. The denim company scored especially solid growth in the Americas and Europe. - AFP
RNZ News
a day ago
- RNZ News
Donald Trump puts 35% tariff on Canada
By Jeff Mason and Ismail Shakil, Reuters Canada's Prime minister Mark Carney, right, and US President Donald Trump at the White House. Photo: AFP / Mandel Ngan US President Donald Trump says the United States will impose a 35 percent tariff on imports from Canada next month and plans to impose blanket tariffs of 15 percent or 20 percent on most other trading partners. In a letter released on his social media platform, Trump told Canadian Prime Minister Mark Carney the new rate would go into effect on 1 August and would go up if Canada retaliated. The 35 percent tariff is an increase from the current 25 percent rate that Trump had assigned to Canada and is a blow to Carney, who was seeking to agree a trade pact with Washington. An exclusion for goods covered by the United States-Mexico-Canada Agreement (USMCA) on trade was expected to stay in place, and 10 percent tariffs on energy and fertiliser were also not set to change, though Trump had not made a final decision on those issues, an administration official said. Trump complained in his letter about what he referred to as the flow of fentanyl from Canada as well as the country's tariff- and non-tariff trade barriers that hurt US dairy farmers and others. He said the trade deficit was a threat to the US economy and national security. Canadian officials say a miniscule amount of fentanyl originates from Canada but they have taken measures to strengthen the border. "If Canada works with me to stop the flow of Fentanyl, we will, perhaps, consider an adjustment to this letter," Trump wrote. Carney's office did not immediately respond to a request for comment. The prime minister said last month that he and Trump had agreed to wrap up a new economic and security deal within 30 days. Trump has broadened his trade war in recent days, setting new tariffs on a number of countries, including allies Japan and South Korea, along with a 50 percent tariff on copper. In an interview with NBC News published on Thursday, Trump said other trading partners that had not yet received such letters would likely face blanket tariffs. "Not everybody has to get a letter. You know that. We're just setting our tariffs," Trump said in the interview. "We're just going to say all of the remaining countries are going to pay, whether it's 20 percent or 15 percent. We'll work that out now," Trump was quoted as saying by the network. Canada is the second-largest US trading partner after Mexico, and the largest buyer of US exports. It bought $349.4 billion of US goods last year and exported $412.7 billion to the US, according to US Census Bureau data. Carney, who led his Liberal Party to a comeback election victory earlier this year with a pledge to tackle trade challenges with the US, had been aiming to negotiate a trade deal with its key trading partner by 21 July. Trump, in his letter, did not specifically address how trade negotiations were proceeding, but he said the "tariffs may be modified, upward or downward, depending on our relationship with your Country." Last month, the Carney government scrapped a planned digital services tax targeting US technology firms after Trump abruptly called off trade talks saying the tax was a "blatant attack". - Reuters
