The U.S. budget deficit edged lower for 2025 as record-setting tariff collections helped offset what also were unprecedented numbers for payments on the spiraling national debt, the Treasury Department announced Thursday.

In a year marked by a bruising trade war and high financing costs, the federal government managed to escape with a $1.78 trillion shortfall, some $41 billion, or 2.2%, less than in fiscal 2024.

While that's still on the high end historically, the red ink would have been still worse had it not been for a massive surge in customs duties and a September surplus of $198 billion that also set a record for the month.

President Donald Trump's tariffs were a major contributor to tariff collections of $202 billion for the year, representing a 142% surge from 2024. September saw

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