The U.S. Treasury said the federal government ran a $291.1 billion budget deficit in July, far wider than the $239 billion gap economists had expected and the second-largest shortfall ever recorded for that month. The figure marked a sharp reversal from June’s $27 billion surplus and was almost 20% higher than the deficit posted in July 2024. Government spending rose 10% from a year earlier to a record $630 billion, driven by higher outlays for Social Security, health-care programs and interest on the debt. Receipts edged up just 2% to $338 billion. Customs-duty income jumped to about $27.7 billion—nearly quadruple last year’s level—reflecting President Donald Trump’s steep tariff increases, including the 145% levy on Chinese goods that took effect in April. The record tariff haul, however, covered less than one-tenth of July’s total spending. For the first 10 months of fiscal 2025 the deficit reached $1.629 trillion, up 7% from the same period a year earlier. Interest payments alone have exceeded $1 trillion so far this year, underscoring the strain higher borrowing costs are placing on the budget. Treasury Secretary Scott Bessent told television networks last week that tariff revenue could approach $300 billion for the full fiscal year, but independent analysts and the Congressional Budget Office still project large deficits to persist for the foreseeable future.