S&P Global, a well-known credit rating agency, has announced a review of its economic forecasts following the implementation of extensive trade tariffs by President Donald Trump. This decision is raising concerns about possible credit score downgrades.

The firm evaluates the creditworthiness of numerous companies and over 130 countries. It noted that the scale of the tariffs introduced by Trump exceeded expectations. Revised forecasts will be released soon, with early projections suggesting a rise in U.S. inflation close to 4% by year-end, up from the previous estimate of 3%.

The impact on U.S. GDP will hinge on how trading partners retaliate and the utilization of tariff revenues, particularly if they are used for tax cuts. Even with potential tax cuts and minimal retaliation, GDP growth is expected to be slightly lower than previous forecasts.

While a recession in the next year is not anticipated, the likelihood of one has increased to around 30%-35%. Other regions, such as the euro zone and China, are also expected to have reduced growth projections, with heavily trade-dependent economies facing larger adjustments.

Although S&P did not predict specific rating changes, Fitch recently downgraded China's rating, indicating a trend towards expected downgrades. S&P experts anticipate countries responding to the tariffs through targeted measures against industries or districts, as well as other non-tariff actions that could impact growth negatively.