The latest U.S. Treasury monthly budget report revealed that the calendar-adjusted budget deficit for November stood at $278 billion, marking a modest year-on-year decline of $1.6 billion, or approximately 6%. Over the first two months of the current fiscal year, the cumulative deficit decreased by 16% compared to the same period last year, signaling some improvement.

Federal government revenue in November surged 14% year-on-year, with tariff collections being the most notable contributor. Monthly tariff revenue reached $32 billion, up from $31 billion in October and significantly higher than the prior three-month average of $29 billion. Since the Trump administration raised U.S. tariffs to their highest levels in nearly a century, tariffs have become a critical revenue source. Treasury Secretary Besant previously noted that rising tariff income would help reduce the deficit-to-GDP ratio.

However, legal risks persist. The U.S. Supreme Court is currently reviewing a pivotal case that could limit presidential authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA) and may require the Treasury to refund certain collected duties.

Separately, the Trump administration announced new tariff measures against Nicaragua on Wednesday. Following an investigation that identified human rights violations "restricting U.S. commercial activities," tariffs will be imposed under Section 301 of the Trade Act, affecting goods outside the Central America Free Trade Agreement (CAFTA-DR). Starting January 1, 2027, a 10% tariff will apply to Nicaraguan imports, rising to 15% in early 2028. This will compound the existing 18% baseline tariff implemented earlier this year, substantially increasing effective rates for some goods.

During the investigation, the administration considered raising tariffs on all Nicaraguan imports to 100% but ultimately refrained from such extreme measures. Nicaragua is currently governed by President Daniel Ortega and his co-president and wife, Rosario Murillo. The U.S. cited their suppression of opposition, media, and NGOs in recent years as justification for the tariff adjustments.

With tariff revenue climbing, the deficit showing temporary relief, and ongoing shifts in international trade policy, markets are closely monitoring U.S. fiscal conditions and the uncertainty stemming from the Supreme Court’s pending ruling on tariff authority.