The government just collected its smallest tariff haul in five months - and the slide is picking up speed.
March tariff revenue came in at $22.15 billion, dropping more than $4 billion from February and falling nearly 30% below October's peak of $31.35 billion. It is the largest single-month decline since the tariff program began.
Two big shifts are behind the decline. Trump pulled back tariffs on grocery items after rising prices became a political problem, and the Supreme Court struck down tariffs from the International Emergency Economic Powers Act on February 20 - making March the first full month under that ruling.
This marks the fifth straight monthly drop since October's peak, with collections falling faster as more duties get rolled back or struck down. The trend line points to more declines in April unless new tariffs are imposed to replace the ones that have been removed.
The grocery rollback alone accounted for a meaningful chunk of the decline. Food prices had become one of the most visible consequences of the tariff policy, with grocery bills rising an average of 6% nationally.
The administration moved quickly once consumer anger started showing up in polls, pulling back tariffs on items like canned goods, dairy, and fresh produce.
The Supreme Court ruling cut even deeper by removing the legal basis for some of the broadest tariffs in the program. The court found that IEEPA - originally designed for financial sanctions and asset freezes - was not meant to authorize trade tariffs, striking down duties that had covered billions of dollars in imports.
The ruling sent ripples through the import community. Companies that had pre-paid IEEPA tariffs immediately began filing for refunds, and trade lawyers say the backlog of claims could take months to process.
The legal precedent also puts other tariff programs on shakier ground, since some share similar legal justifications.
Even with the slide, tariffs have brought in about $166 billion this fiscal year - still a big number, but one that is shrinking month by month. At this pace, the administration would collect roughly $200 billion for the full fiscal year, well below the $250 billion some analysts projected when tariffs were at their peak last fall.
The risk for investors: If revenue keeps falling, the government loses a source it had been counting on to offset tax cuts. And with Trump now threatening 50% tariffs on China, the policy picture could flip again fast - adding back revenue but also adding cost pressure for companies that import from China.
Courts are still working through legal challenges to several other tariff programs. If more duties get struck down, the $166 billion already collected could face refund claims, creating a new budget headache on top of falling collections.
Importers have already filed thousands of refund requests tied to the February ruling, and trade lawyers say more are coming. The combination of court losses and political rollbacks has made tariff revenue one of the most unreliable budget items in Washington.