iCloud reports more space than expected
Solar Mike's guess was correct. I had deleted stuff that was in my iCloud Drive and those "deleted" stuff was still taking up space.

When you delete something on your Mac, it goes to ~/.Trash. However, when you delete something that was on iCloud Drive, that doesn't go to ~/.Trash. It goes to:

/Users/username/Library/Mobile Documents/com~apple~CloudDocs/.Trash


So make sure that you check out the iCloud Drive's trash if there is a big mismatch between the size reported by Finder and by iCloud.