U.S. Deficit Hits $2T Despite Record Tariffs, Markets Remain Unfazed
The U.S. deficit has surged past $2 trillion, with tariff revenues reaching a monthly record of $31 billion—yet covering less than 10% of the shortfall. Annual tariff revenue now stands at $350 billion, a 355% year-over-year increase, marking the highest effective rate since 1935 at 17.3%. Despite paused U.S.-China tariffs and WHITE House negotiations for a 90-day extension, the fiscal gap continues to widen.
Deficit spending exceeds $300 billion monthly, projecting a potential $2.7 trillion shortfall by 2026. Tariffs now account for 18% of household income taxes, a stark rise from the pre-2025 average of 4%. Markets, however, show no signs of concern, with the S&P 500 gaining $16 trillion in value amid the fiscal turbulence.