S&P Global Ratings has affirmed the United States’ sovereign credit rating at ‘AA+’ with a stable outlook, citing improved tariff revenue and resilient economic fundamentals despite persistent fiscal challenges.
In a statement released Tuesday, the ratings agency said Washington’s strong tariff collections boosted by elevated duties on imports from China and other major trading partners have provided a valuable buffer to federal revenues as interest expenses and entitlement costs climb.
S&P noted that while America’s long-term fiscal trajectory remains strained by rising deficits and mounting public debt, above-forecast import taxes have contributed to stronger-than-anticipated cash flows during the first half of 2025.
The agency also highlighted robust GDP growth, a flexible monetary policy framework, and deep capital markets as key pillars supporting the US’s premier credit standing.
However, S&P warned that sustained political gridlock over budget consolidation and debt-ceiling negotiations still posed significant risks to confidence if left unaddressed.
The United States lost its prized AAA rating from S&P in 2011 following a prolonged debt-ceiling standoff in Congress, but has maintained the ‘AA+’ rating since then.
Tuesday’s decision comes as the Biden administration considers higher tariffs on certain goods under its broader industrial strategy, a move that analysts say could further bolster revenue but also risk retaliation from trading partners.
S&P said any upward pressure on the rating is unlikely without “meaningful reform” to entitlement spending, typically the most politically contentious part of the federal budget.
Treasury officials welcomed the affirmation, saying it reflected global investor faith in the US economy and its ability to meet debt obligations, even amid periods of policy uncertainty.
Yields on 10-year US Treasury bonds held steady at 4.15 percent following the news, and markets were largely unmoved, reflecting expectations that the rating would remain unchanged.
Economists say the S&P decision sends a signal that while the United States retains significant fiscal headroom, ongoing reliance on tariff income is not a substitute for long-term deficit control.
Written By Ian Maleve
