The US federal government’s spending surged in July, pushing the year-to-date deficit beyond $1.6 trillion and on track to breach the $2 trillion mark by the end of the fiscal year. Despite claims that tariffs would offset costs, the additional revenue generated from these measures is woefully insufficient to cover the growing deficit.
In January, the debt ceiling was reinstated under the Fiscal Responsibility Act, limiting the government’s spending and prompting Treasury to implement “extraordinary measures” to avoid default. However, with the new debt ceiling signed into law in July by President Trump, the brakes are off, and spending continues unabated.
Supporters argue that tariffs will bring in a significant revenue stream, but the numbers paint a different picture. The additional tariff revenue generated since June is only $19 billion per month, dwarfed by the $630 billion spent in July alone. When accounting for economic damage caused by the trade war, including higher prices and reduced tax revenues, the net effect of tariffs is negligible.
The administration’s reliance on tariffs to balance the budget ignores the fact that debt will continue to grow at a rapid pace, reaching 100% of GDP by the next few years. Unless drastic measures are taken, Washington will be facing an insurmountable interest bill, rather than simply another spending surge. The temporary calm created by the debt ceiling has long since passed, leaving policymakers sprinting toward a fiscal cliff edge.
Source: https://www.nationalreview.com/2025/08/tariffs-wont-bridge-the-fiscal-gap