S&P Global on Monday affirmed its "AA+" credit rating on the US, saying the revenue from President Donald Trump's tariffs will offset the fiscal hit from his massive tax-cut and spending bill.
Trump signed the "One Big Beautiful Bill Act" into law in July after it was passed by the Republican-controlled Congress. The bill, which delivered new tax breaks, also made Trump's 2017 tax cuts permanent.
"At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation," S&P said in a statement.
The US reported a $21 billion jump in customs duty collections from Trump's tariffs in July, but the government budget deficit still grew nearly 20% in the same month to $291 billion. Interest on the public debt also continued to grow, hitting $1.013 trillion in the first 10 months of the fiscal year, an increase of 6%, or $57 billion, over the prior-year period due to slightly higher interest rates and increased debt levels.
S&P, which became the first ratings agency to cut the pristine US government rating in 2011, said the outlook on the US rating remains stable. The ratings agency said it expects the Federal Reserve, which Trump has criticised this year for not cutting interest rates, "to navigate the challenges of lowering domestic inflation and addressing financial market vulnerabilities."
It projected the country's general government deficit to average 6.0% of GDP during the 2025-2028 period, down from 7.5% in 2024 and from an average 9.8% of GDP in 2020-2023. S&P said it could lower the rating over the next two to three years if already high deficits increase.
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