Trump Tariffs Result In $16B Windfall For April, Rates Still At Nine-Decade Highs Despite UK And China Deals

President Donald Trump's reciprocal tariffs generated sizable revenue for the country in April, even as they created considerable uncertainty in the markets.

The Treasury Department's April federal budget, released on Monday, showed that $16.3 billion was generated in customs duties during the month. This marked a sharp increase from the $8.75 billion collected in March and more than doubled from $7.1 billion in the year-ago period.

The fiscal year-to-date (YTD) collections totaled $63.31 billion, up 18% from a year earlier.

The rise in customs duties was due to the 10% across-the-board baseline tariffs the Trump administration has been implementing since early April. The 10% rate is on top of the selective levies already in place. 

Trump hit China with a steeper 145% duty rate following his "Liberation Day" tariffs, which have now been suspended for 90 days after both countries negotiated a temporary rollback over the weekend.

The spurt in customs revenue resulted in a budgetary surplus of $258 billion for April, although the fiscal YTD balance showed a deficit of $1.05 trillion. The YTD deficit compares to the fiscal year 2024 deficit of $1.83 trillion.

Meanwhile, a new report found that tariff rates remained extremely high in May despite the U.S. striking bilateral trade deals with China and the UK. A Yale University report found that consumers faced an average effective tariff rate of 17.8%, which was the highest since 1934. 

According to the report, the full slate of 2025 U.S. tariffs and retaliatory foreign measures is projected to shave 0.7 percentage points off real GDP growth in calendar year 2025.

The unemployment rate is expected to rise by 0.35 percentage points by year-end, while payroll employment is forecast to be 456,000 lower in the same quarter.

The economic drag is seen persisting beyond 2025, with real GDP estimated to remain 0.36% smaller over the long run — equivalent to a $110 billion annual loss in 2024 dollars. U.S. exports are projected to fall 15.5%.

Following the China trade deal, the Invesco QQQ Trust (QQQ) has cut its year-to-date losses to 0.51%. The SPDR S&P 500 ETF (SPY) is down 0.23%, while the iShares MSCI China ETF (MCHI) has gained about 18%.

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