Bad sign for Trump USA's credit rating downgraded due to governance
The rating agency Scope has downgraded the USA's credit rating and given President Trump's government a poor political report card. The reasons are concentration of power, budget blockade and growing national debt.
25.10.2025, 06:28
25.10.2025, 07:48
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- Scope has lowered the US credit rating to AA- due to political instability and high debt.
- Trump's concentration of power and disregard for the separation of powers are criticized.
- The strong economy prevents a lower rating, but pressure on the central bank is growing.
The European rating agency Scope has downgraded the USA's credit rating due to lower standards of governance, among other things. The Berlin-based financial services provider lowered the USA's credit rating from AA to AA- on Friday.
At the same time, the outlook improved from "negative" to "stable". However, the political report card for the government of US President Donald Trump was quite devastating.
"The weakening of governance standards, in particular the erosion of the established separation of powers, reduces the predictability and stability of US politics", the agency's latest report states. This unpredictability has also been demonstrated in the US's dealings with important trading partners in customs policy - and increases the risk of mistakes being made in day-to-day political business.
Courts disregarded, controls undermined
Scope is particularly concerned about "the increasing accumulation of power by the executive", which should actually be contained by parliament and independent courts: "The government has repeatedly disregarded court rulings, questioned the authority of the judicial authorities, undermined congressional controls and sidelined independent institutions." One negative example is the many presidential decrees with which Trump has single-handedly pushed through his government policy and weakened Congress.
The "political polarization and paralysis of legislation" favoured by the government's conduct is also evident in the current budget blockade - already the second longest in US history. This division is making compromises and urgently needed reforms more difficult, which, according to Scope, are overdue in areas such as the tax, healthcare and pension systems.
USA is highly indebted
The rating agency's second main point of criticism alongside the political problems is the country's financial situation. The USA is heavily indebted, with an ever-increasing proportion of government revenue going on interest. If the government does not take countermeasures, the debt ratio will rise to 140 percent by 2030, the experts warn. Trump's "One Big Beautiful Bill" - a law passed in the summer despite considerable opposition, which provides for higher government spending in some areas - is also to blame.
According to Scope, the fact that the USA's overall credit rating is not even worse is due to its "healthy, competitive and highly diversified economy", its government bonds, which are still popular with investors, the role of the US dollar as a global currency reserve and a globally respected central bank, the Federal Reserve (Fed).
Auditors warn of pressure on central bank
However, the latter is also a cause for concern for credit rating agencies. In view of the Trump administration's ongoing political pressure on the Fed to lower interest rates, they see a growing risk that the central bank will also miss its long-term inflation target of two percent in the coming years.
Scope is a relatively young company in the rating industry and was the first agency from Europe to join the ranks of credit rating agencies accepted by the European Central Bank in 2023. The major US agencies S&P Global, Moody's and Fitch are particularly well-known internationally.
