the staff of the Ridgewood blog
WASHINGTON, D.C. — S&P Global has reaffirmed the United States’ credit rating at “AA+”, pointing to strong tariff revenue as a key factor offsetting the fiscal burden of President Donald Trump’s sweeping new spending and tax-cut legislation.
The rating remains at “AA+/A-1+”, S&P’s second- and third-highest designations, with a stable outlook for the U.S. economy.
Tariffs Cushion Fiscal Impact of “One Big Beautiful Bill Act”
In July, President Trump signed into law the “One Big Beautiful Bill Act,” a massive tax-cut and spending package that raised the U.S. borrowing limit to $41 trillion. Analysts estimate the legislation could add $5 trillion to the national debt ceiling.
Yet S&P noted that tariff revenues—nearly $50 billion in Q2 alone—are helping balance the books, softening the impact of higher spending and tax cuts.
“Broad revenue buoyancy, including robust tariff income, will offset any fiscal slippage from tax cuts and spending increases,” S&P said in its statement.
Debt and Deficit Concerns Still Loom
The U.S. deficit now stands at 6.2% of GDP, according to the Federal Reserve Bank of St. Louis. S&P cautioned that the fiscal profile remains the nation’s key weakness, but expressed confidence that America’s “resilient and diverse economy” and credible monetary policy will keep the rating stable.
S&P also noted that while the debt ceiling remains divisive, it expects it will continue to be resolved in a “timely fashion” due to the severe consequences of inaction.
How S&P’s Decision Compares to Moody’s
S&P’s reaffirmation comes just months after rival ratings agency Moody’s downgraded the U.S. credit rating. On May 16, Moody’s cut the rating from “Aaa” to “Aa1”, citing rising government debt, now at $37 trillion, and higher interest costs compared with similarly rated countries.
Moody’s warned that America’s debt trajectory poses long-term risks, whereas S&P emphasized tariff revenues and the economy’s resilience as near-term stabilizers.
Outlook for the U.S. Economy
S&P concluded that despite rising debt, the U.S. economy remains robust:
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✅ Stable rating outlook
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✅ Credible and effective monetary policy
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✅ Resilient and diverse economic base
For now, S&P believes that strong tariff income and steady fiscal revenues will continue to support America’s creditworthiness, even as the debt load grows.
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