16 Billion Dollars.
That’s how much revenue the US government took in from tariffs in the month of April.
This represents by far the largest intake of money from US customs on record.
At first glance, it seems like tariffs may already be impacting the US government’s budget.
In April, the US government also saw its second largest surplus on record.
The vast majority of the time, the government operates in a steep deficit.
A surplus like April’s is extremely rare, let alone one of this magnitude.
So could tariffs already be fixing all of the government’s debt problems just as Donald Trump promised they would?
That’s certainly what many media outlets are suggesting in their headlines right now.
If true, this could mark a massive turning point in the economic landscape, moving away from an environment where the US government’s fiscal situation has been absolutely catastrophic.
Our Treasury Market Warning
We recently sounded the alarm on the Treasury market, highlighting why we believe there could be a larger decline in bond prices over the coming months.
The US Treasury bond market has already declined 50% since 2020 as a result of record debt burdens.
But, we’ve made the case for why the worst may be yet to come.
The US government faces a $7 trillion maturity wall in 2025, along with continued record deficit spending.
A collapse in the bond market could lead to disastrous consequences for the economy.
It would cause interest rates to spike throughout the economy, making housing less accessible, reducing business financing access, and directly slowing economic growth.
So the question is: are tariffs really reversing all of this after just one month?
Well, the data for April shows that net government receipts vastly exceeded outlays.
This simply means the government took in more money than it spent.
Going back to 2015, this has been very rare.
About $16 billion of these receipts can be explained by tariff revenues, which doubled from $8 billion in March.
However, when examining the Treasury bond market through TLT (an ETF tracking US Treasury bond prices), bond prices have actually been falling over the last month.
They’re potentially preparing to take out their October 2023 lows.
So, this chart below doesn’t reflect easing concerns around government debt…
Quite the opposite.
This leads to 2 potential interpretations:
- Treasury bonds represent a massive buying opportunity because they haven’t yet accounted for tariffs solving the deficit problem
- Tariffs don’t significantly change the government’s financial situation, and bonds remain at risk of further downside
Unfortunately, we believe the latter is correct and we’ll show you why in the next section.
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The Reality Behind the Recent Surplus
Diving deeper into April’s government surplus reveals the total government income was $850 billion.
Comparing this to the $16 billion from tariffs shows that tariffs remain relatively insignificant in the grand scheme.
Most of the jump in government income came from tax revenues, which represented $460 billion in April – much higher than expected.
Unfortunately, much of this tax revenue jump was temporary.
The government received deferred tax payments from federally declared disaster areas impacted by Hurricanes Helene and Milton, with deadlines falling on May 1st.
So, April’s large surplus is quite unlikely to be repeated in coming months.
Our Continued Treasury Market Outlook
Tariffs have not solved the government’s debt crisis within a single month.
This is why we maintain our bearish view on the US Treasury bond market heading into the second half of 2025.
We may even be shorting the bond market at Bravos Research.
That said, there’s still a silver lining.
Tariffs may be small, but they are finally a step towards trying to get the government budget under control.
We haven’t seen this for quite some time.
Every fiscal year since 2020 has seen big deficits ranging from $1.4 trillion to $3.2 trillion.
2025 hasn’t been different until this April data point.
We absolutely need to see more months like this.
Reduced government budget concerns would directly lead to:
- Lower interest rates throughout the economy
- Reduced tax burden on average Americans
This would make us much more constructive on the long-term US economic outlook and could lead to a massive economic boom.
Regardless of what happens next with the economy, there will be opportunities to capitalize on in financial markets.
At Bravos Research, we work day in and day out to help you spot these opportunities.
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