* Dagong cuts U.S. ratings to BBB+ from A-, outlook negative
* Says tax cuts, increasing reliance on debt weaken U.S. solvency
* U.S. now on par with Peru, six notches below Chinese local debt
By Ryan Woo and Marius Zaharia
BEIJING/HONG KONG, Jan 16 (Reuters) - China's Dagong Global Credit Rating Co, one of the country's major ratings firms, cut the sovereign ratings of the United States to BBB+ from A-, saying the tax reductions announced last month weakened Washington's ability to repay debt.
The ratings, which are now level with those of Peru, Colombia and Turkmenistan on the Beijing-based agency's scale of creditworthiness, have also been put on a negative outlook.
In a statement on Tuesday, Dagong warned that the United States' increasing reliance on debt to drive development would erode its solvency. It made specific reference to President Donald Trump's tax package, which is estimated to add $1.4 trillion over a decade to the $20 trillion national debt burden.
"Deficiencies in the current U.S. political ecology make it difficult for the efficient administration of the federal government, so the national economic development derails from the right track," Dagong said.
"Massive tax cuts directly reduce the federal government's sources of debt repayment, therefore further weaken the base of government's debt repayment."
The U.S. embassy in Beijing could not immediately comment.
The downgrade came as China's excess production capacity for both steel and aluminum emerged as a major trade irritant for the United States, which is considering new steps to shield its industries and jobs.
Dagong's cut has put the United States on par with ratings for most emerging economies.
Christopher Balding, associate professor of business and economics at the Peking University HSBC Business School in Shenzhen, said such a ratings decision "simply doesn't make sense, looking at the numbers".
He noted that "the U.S. economy has been doing very well lately."
Fitch and Moody's Investors Service both give the United States their top AAA ratings. S&P Global rates it AA+.
But while western ratings agencies have more upbeat views on the United States, they too have expressed concerns similar to Dagong's.
S&P Global said last month's proposed U.S. tax cuts would increase the federal deficit and looser fiscal policy could prompt negative action on U.S. credit ratings if Washington failed to address long-term fiscal issues.
In November, Fitch said the tax cuts would give a short-lived boost to the economy, but add significantly to the federal debt burden. It warned that the United States was the most indebted AAA-rated country and ran the loosest fiscal policies.