Trump signed the massive package of tax-cut and spending bill, dubbed the ‘One Big Beautiful Bill Act’, into law in July.

The bill, which delivered new tax breaks, also made Trump’s 2017 tax cuts permanent.

“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.

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

The US reported a US$21 billion jump in customs duty collections from Trump’s tariffs in July, but the government budget deficit still grew nearly 20% in the same month to US$291 billion.

Since returning to power in January this year, Trump has launched a global trade war with a range of tariffs that have targeted individual products and countries.

The president has set a baseline tariff of 10% on all imports to the US, as well as additional duties on certain products or countries.

S&P said the outlook on the US rating remains stable.

The ratings agency expected the Federal Reserve, which Trump has often criticised for not cutting rates fast, “to navigate the challenges of lowering domestic inflation and addressing financial market vulnerabilities”.

It projected the country’s general government deficit to average 6% of GDP during the 2025-2028 period, down from the 7.5% in 2024, and from an average 9.8% of GDP in 2020-2023.

Peer Moody’s downgraded the US sovereign debt rating in May citing rising debt.