S&P Global has reaffirmed its AA+ long-term credit rating on the United States, citing revenue from President Donald Trump’s sweeping tariff regime as a key factor in offsetting the fiscal pressures of his latest tax-and-spending package.
The legislation, dubbed the “One Big Beautiful Bill Act”, was signed into law in July and makes permanent Trump’s 2017 tax cuts while introducing a new wave of breaks alongside increased public spending. The move has drawn scrutiny over its potential to widen the federal deficit, but S&P suggested that additional income from tariffs could help balance the government’s books.
“Amid the rise in effective tariff rates, we expect meaningful tariff revenue to generally offset weaker fiscal outcomes that might otherwise be associated with the recent fiscal legislation, which contains both cuts and increases in tax and spending,” S&P said in its assessment. “At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation.”
Customs data for July underscored the scale of tariff-driven inflows, with collections rising by $21 billion. However, the broader fiscal picture remains challenging. The US budget deficit grew nearly 20% in the same month, reaching $291 billion.
Since returning to office in January, Trump has intensified his protectionist trade policies, imposing a blanket 10% tariff on all imports into the United States while layering additional duties on certain countries and products. The measures have reignited tensions with major trading partners and fuelled concerns about higher consumer costs, but S&P’s analysis suggests they are providing a substantial fiscal cushion.
The ratings agency maintained a stable outlook on US sovereign credit, though it flagged several risks ahead. It projected that the country’s general government deficit will average 6% of GDP between 2025 and 2028, down from 7.5% this year and sharply lower than the pandemic-era average of 9.8% from 2020 to 2023.
S&P also noted the role of monetary policy in supporting economic stability, saying it expected the Federal Reserve to continue navigating the “dual challenges of lowering domestic inflation and addressing financial market vulnerabilities.” Trump has repeatedly criticised the central bank for not cutting interest rates quickly enough, fuelling ongoing tensions between the White House and Fed officials.
The decision to hold the US rating at AA+ contrasts with a move by peer agency Moody’s earlier this year. In May, Moody’s downgraded America’s sovereign debt, citing concerns over rising federal debt levels and long-term fiscal sustainability.
For now, S&P’s stance offers reassurance to investors that the world’s largest economy retains solid creditworthiness, even as fiscal policy grows more expansionary and trade tensions escalate under Trump’s renewed presidency.
