U.S. tariff revenue declined sharply in December, offering fresh evidence that President Trump’s aggressive trade policies are reshaping global commerce and slowing the flow of goods into American ports. A new report from the U.S. Treasury released Tuesday showed that $27.89 billion in tariff revenue was collected in December, nearly $3 billion less than in November and more than 10% below the October peak.
The December figure caps off a historically lucrative year for tariff collections, with total revenue reaching $264.05 billion in 2025—an unprecedented annual haul. However, it also marks the second consecutive monthly decline after the Trump administration rolled back or adjusted key tariffs late last year. October saw the highest monthly intake at $31.35 billion, followed by $30.76 billion in November before the more pronounced drop in December.
The downturn in tariff revenue reflects broader shifts in U.S. trade flows. Commerce Department data released alongside the Treasury report showed the U.S. trade deficit narrowed to $29.4 billion in November, the lowest level since mid-2009. While the data was delayed due to last fall’s government shutdown, it underscores a clear trend: less trade activity involving the United States, driven largely by sweeping tariff measures.
Administration officials have framed the shrinking trade deficit as a major policy success. Treasury Secretary Scott Bessent recently credited President Trump’s trade agenda for the improvement, noting that the deficit has fallen back to levels not seen since the aftermath of the global financial crisis. When Trump introduced his tariff regime earlier in the year, monthly customs revenues surged dramatically, rising from just $7.25 billion in February and climbing steadily through October.
Yet the recent step-down in revenue highlights the limits of tariffs as a long-term funding source. The Congressional Budget Office has already slashed its projected tariff receipts for the coming decade by roughly $1 trillion, suggesting that trade volumes are adjusting downward faster than policymakers initially anticipated. This has implications for Trump’s broader fiscal ambitions, many of which have leaned heavily on tariff income.
The president has repeatedly suggested that tariffs could fund a wide range of priorities, from tax cuts to infrastructure to national defense. Most recently, Trump argued that tariffs could support a proposed $500 billion annual increase in the U.S. military budget—a figure that exceeds twice the total tariff revenue collected in all of 2025.
Meanwhile, uncertainty continues to loom over global trade in 2026. The White House has issued new tariff threats, including a proposed 25% levy on goods from any country doing business with Iran. At the same time, a closely watched Supreme Court decision on the legality of Trump’s broad “blanket” tariffs could arrive as early as this week.
Trade data underscores the scale of the shift already underway. Shipping analytics firm Project44 reported that U.S. imports from China fell 28% in 2025, while U.S. exports to China dropped 38%, describing the change as one of the sharpest bilateral trade contractions in recent history. While shipping volumes appear to be stabilizing, they are doing so at a markedly lower level.
As the U.S. recalibrates its trade posture, the rest of the world is moving in a different direction. The European Union recently approved a landmark free-trade agreement with Mercosur nations in Latin America, creating one of the world’s largest trade blocs and highlighting a growing divergence in global trade strategies.
