U.S. Credit Rating Stable at AA+ Amid Tariff Revenue Surge

Standard & Poor's Global Ratings has affirmed the United States' credit rating at "AA+," maintaining a stable outlook. The agency emphasized that the economic impact of tariffs will be a crucial factor in determining the country's future credit rating. The agency's analysts expressed concerns about the long-term economic effects of the U.S. trade policies, which could pose significant risks to the country's credit rating in the coming years.

The agency highlighted that the execution and effectiveness of the U.S. trade tariffs and budget policies will be decisive factors in future ratings. The chief U.S. analyst at Standard & Poor's Global Ratings stated that the focus is on how the government implements budget legislation and generates tariff revenue, and their overall impact on economic growth and investment.

The agency noted that while the tax cuts and spending bill may not reduce the U.S. budget deficit, tariff revenues are expected to offset some of the deficit expansion caused by the spending bill. However, the agency also warned that if fiscal conditions deteriorate beyond expectations, it could lead to a rating adjustment. The agency's forecast range for assessing U.S. credit is approximately three to four years.

The significant changes in tariff rates are expected to generate substantial revenue. The agency noted that the average effective tariff rate in the U.S. has surged from 2.4% at the beginning of the year to 18.6%. This dramatic increase is seen as a potential significant offset to the budget deficit.

Despite the increase in tariff revenue, the U.S. government reported a 20% increase in the budget deficit for July, reaching 291 billion dollars. The national debt has also surged to a record high of 3.7 trillion dollars. The agency stated that recent budget legislation and trade agreements have provided a clear picture of the U.S. sovereign rating and outlook. Looking ahead, changes in the U.S. fiscal health will be key to further rating actions, which are based on economic and institutional strength.