S&P Global upheld the US’ sovereign credit rating at ‘AA+’ with a stable outlook on Monday, citing a sharp rise in tariff revenue as a mitigating factor against the fiscal pressure stemming from new tax cuts and government spending.
The agency highlighted the “meaningful tariff revenue” generated by President Trump’s import levies, including a one-off jump of $21 billion in customs duty collections in July, as a counterweight to the deficit-inflating effects of the “One Big Beautiful Bill Act,” enacted in July.
Nonetheless, the US budget deficit climbed nearly 20% in July, reaching $291 billion. Projections from S&P suggest that the general government deficit will broadly decline to around 6% of GDP in the 2025–28 period, down from a 7.5% baseline in 2024 and a 9.8% average from 2020 to 2023.
S&P retained its stable outlook, signalling confidence in the Federal Reserve’s capacity to manage inflation and market vulnerabilities. In contrast, Moody’s downgraded the US credit rating to Aa1 in May, citing rising debt and ongoing fiscal gaps as the core concern.
