S&P Global Reaffirms US ‘AA+’ Credit Rating, Citing Tariff Revenues as Offset to Trump’s Tax and Spending Bill

S&P Global announced on Monday that it has affirmed its ‘AA+’ credit rating on the United States, stating that tariff revenues generated under President Donald Trump’s trade policies are expected to counterbalance the fiscal impact of his recently signed tax and spending legislation.

The legislation, formally named the ‘One Big Beautiful Bill Act,’ was signed into law by Trump in July. The sweeping package introduced new tax breaks while also making permanent the tax cuts enacted in 2017 during Trump’s first term.

“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 a statement. The agency added, “At this time, it appears that meaningful tariff revenue has the potential to offset the deficit-raising aspects of the recent budget legislation.”

The latest federal figures showed that customs duty collections surged by $21 billion in July as a result of Trump’s tariffs. Despite the boost in trade-related revenue, the US budget deficit expanded nearly 20 per cent in the same month, climbing to $291 billion.

Since returning to the presidency in January, Trump has reignited a global trade war, imposing a broad 10 per cent baseline tariff on all imports to the United States while layering on additional duties for specific products and targeted countries. His aggressive tariff measures have been defended by the administration as necessary for protecting US industries and raising government revenues.

S&P confirmed that the outlook for the US rating remains stable. The agency also expressed confidence in the Federal Reserve, which has come under repeated criticism from Trump for not reducing rates swiftly enough. According to S&P, the central bank is expected “to navigate the challenges of lowering domestic inflation and addressing financial market vulnerabilities.”

Looking ahead, S&P projected that the country’s general government deficit will average 6.0 per cent of GDP between 2025 and 2028, a decline from the 7.5 per cent recorded in 2024 and substantially lower than the average of 9.8 per cent during the 2020-2023 period.

By contrast, peer ratings agency Moody’s took a more pessimistic view earlier this year, downgrading the US sovereign debt rating in May over concerns about rising government debt levels.

By fLEXI tEAM