Containers at PortMiami. The CBO estimated that tariff revenue would reduce federal deficits by $3 trillion over a decade, but that wasn’t enough to offset other, deficit-increasing, elements of Trump’s economic program. (Eva Marie Uzcategui/Bloomberg)
February 11, 2026 5:09 PM, EST
Tariff revenue helped shrink the U.S. budget deficit by 17% in the first four months of the fiscal year, showcasing one of the stakes for the administration as the Supreme Court weighs whether President Donald Trump had the authority to impose most of his duties.
The budget deficit fell to $697 billion for the four months through January from $840 billion for the same period the year before — a 17% decline. After adjusting for differences in the calendar, the deficit for fiscal 2026 so far declined 21%.
Revenues are climbing faster than spending, as receipts climbed 12%, while outlays were only up by 2%. Customs duties totaled $124 billion for October through January, up some 304% from 2025.
Earlier Feb. 11, the Congressional Budget Office estimated that tariff revenue would reduce federal deficits by $3 trillion over a decade — if the duties on the books as of Nov. 20 were left unchanged through that period.
But that wasn’t enough to offset other, deficit-increasing, elements of Trump’s economic program. The CBO increased its 10-year total deficit forecast by $1.4 trillion, incorporating the tax cuts from last July’s signature Republican legislation along with other new assumptions.
Corporate Taxes
Trump’s tariffs have been the subject of legal and legislative wrangling since last year. The Supreme Court is deliberating on a case that could toss many of the measures over the question of whether Trump has the ability to impose them using his emergency economic powers. The administration has said it will use other, potentially more cumbersome, methods to reimpose some of the duties if it loses the case.
Meantime, the latest budget figures showed a decline in gross corporate tax revenue in the wake of reduced levies on companies that were included in last year’s tax legislation. Such receipts fell to $125 billion for the past four months from $146 billion for the same period of the prior year.
