Economy

US President Donald Trump blames Democrats for looming federal layoffs as shutdown enters fifth day.

The White House has warned that mass layoffs of federal workers could begin if US President Donald Trump concludes that negotiations with congressional Democrats to end a partial government shutdown have reached a dead end.

As the shutdown entered its fifth day on Sunday, White House National Economic Council Director Kevin Hassett told CNN’s programme State of the Union that he believed there was still a chance Democrats would yield and avoid what could become a costly political and economic crisis.

“President Trump and Russ Vought are lining things up and getting ready to act if they have to, but hoping that they don’t,” Hassett said, referring to the White House budget director. “If the president decides that the negotiations are absolutely going nowhere, then there will start to be layoffs.”

Trump, speaking to reporters on Sunday, described the potential job cuts as “Democrat layoffs”, saying, “Anybody laid off, that’s because of the Democrats.”

Talks remain frozen

There have been no meaningful negotiations since Trump last met congressional leaders, with the impasse beginning on October 1 — the start of the federal fiscal year — after Senate Democrats rejected a short-term funding bill to keep government agencies open through November 21.

“They’ve refused to talk with us,” Senate Democratic leader Chuck Schumer told the CBS programme Face the Nation, insisting that only renewed talks between Trump and congressional leaders could end the standoff.

Democrats are demanding a permanent extension of enhanced premium tax credits under the Affordable Care Act (ACA) and assurances that the White House will not unilaterally cut spending agreed to in any deal.

Senate Majority Leader John Thune said he was open to addressing the Democrats’ concerns, but urged them to first back reopening the government. “It’s open up the government or else,” Thune told Fox News. “That’s really the choice that’s in front of them right now.”

Trump said Republicans were also willing to discuss healthcare reform. “We want to fix it so it works. Obamacare has been a disaster for the people, so we want to have it fixed so it works,” Trump said.

No deal in sight

Rank-and-file senators from both parties have held informal talks on healthcare and spending to break the deadlock, but progress has been minimal. “At this point, no,” Democratic Senator Ruben Gallego told CNN when asked if lawmakers were closer to a deal.

The Senate is set to vote again on Monday on competing funding bills — one backed by the Republican-controlled House and one proposed by Democrats — though neither is expected to win the 60 votes required to advance.

According to the Congressional Budget Office, nearly 750,000 federal employees face being furloughed as long as the shutdown continues, with total lost compensation estimated at $400m per day. While federal workers are guaranteed back pay under the 2019 Government Employee Fair Treatment Act, payments will only resume once the shutdown ends.

Varanasi, India – Mohammed Ahmad Ansari has spent his entire life in the narrow and congested lanes of Varanasi, a city often described as the spiritual capital of India, and the constituency of Indian Prime Minister Narendra Modi.

The 55-year-old has spent decades weaving Banarasi saris and thoroughly enjoys the clacking noises of handlooms at work against the backdrop of temple bells and evening calls of azan in the holy city that is widely believed to be the oldest settlement in India, dating back as early as 1800 BCE and known for the blend of Hindu-Muslim culture.

But of late, sales have taken a hit for a range of reasons, the latest being ongoing tensions between India and its neighbour, Bangladesh.

Diplomatic relations between the once-close allies have been sharply tested since August last year, when former Prime Minister Sheikh Hasina fled to New Delhi from Dhaka after an uprising against her rule.

Bangladesh blames India for some of its troubles, including Modi’s support for Hasina when she was in power.

There have been a few attacks on religious minorities, including Hindus, since her overthrow, as those communities were viewed as Hasina supporters, and Indian businesses, too, have been boycotted or attacked in Bangladesh as the country demands that New Delhi hand over Hasina to face charges in her home country.

In April, Bangladesh restricted the imports of certain items from India, including yarn and rice. On May 17, India retaliated by banning the imports of readymade garments and processed food items from Bangladesh across land borders. While Bangladesh can still send its saris to India, it will have to use the more expensive and time-consuming sea route.

Banarasi saris are globally known for their exquisite craftsmanship, luxurious silk, meticulous zari work of fine gold and silver wire embroidery, and it can often take up to six months to weave a single sari. These can sell for as much as 100,000 rupees ($1,130) each, or more, depending upon the design and the material used.

“These saris are in high demand in Bangladesh during festivals and weddings, but the ban has led to a more than 50 percent drop in business,” Ansari told Al Jazeera.

This is the latest blow to the industry that has already been hit with earlier government policies – including the so-called demonetisation when India overnight invalidated high-value notes and a hike in power tariffs – as well as the COVID-19 pandemic and cheaper competition from saris made on advanced power looms in other parts of the country, particularly Surat in Gujarat in western India.

This onslaught of the past few years has added up, forcing weavers out of the business and halving their numbers to about 200,000 now, as the rest either left the city in search of other jobs or took up new jobs, like driving rickshaws to earn a living.

Pawan Yadav, 61, a wholesale sari trader in Varanasi, told Al Jazeera that the business has come to a standstill since the change of regime in Dhaka.

“We used to supply around 10,000 saris annually to Bangladesh, but everything has come to a halt,” Yadav said, adding that he is still owed 1.5 million rupees ($17,140) by clients in the neighbouring country, “but the recovery seems impossible due to the political turmoil.”

India has 108 documented ways of draping sarees that hold a special position globally for their intricate designs, vibrant colours symbolising timeless elegance and beauty.

Despite the current turmoil, the textile sector employs the second-highest number of people after agriculture in India, with more than 3.5 million people working in it, per government data. Within that, the sari industry is valued at approximately 80,000 crore rupees ($9.01bn), including some $300m in exports.

Varanasi’s weavers and traders, who voted Modi into parliament for the third consecutive time, are waiting for the prime minister to find an amicable solution to the trade issue with Bangladesh.

In 2015, the Modi government designated August 7 as the National Handloom Day and promised to bring a change in the lives of handloom weavers by promoting domestic products. But nothing meaningful has come of that so far, traders and weavers who spoke to Al Jazeera said.

“India has a unique handloom craft which no country can compete with,” but without sufficient businesses or reliable income, many artisans have been forced to abandon the trade, and now “it is difficult to even find a young weaver”, Ramesh Menon, founder of Save the Loom, a social enterprise working for the revival of handloom, said. “The need of the hour is to re-position handloom as a product of luxury, and not poverty.”

West Bengal traders welcome ban

The situation, however, is completely different in West Bengal, around 610km (380 miles) from Varanasi and along the border with Bangladesh.

The ban on the sari trade between the two countries has offered a new lease of life to the traders of cotton saris in Bengal, who had been losing market share to Dhaka’s saris.

Tarak Nath Das, a cotton sari trader for the past four decades in Shantipur in West Bengal, supplies saris woven by local artisans to various showrooms across the country.

After years of losses, the 65-year-old finally saw business boom in the last few weeks in the lead-up to the main festival of Durga Puja, and was all smiles.

“The saris from Bangladesh had devoured at least 30 percent of our market, and the local industry was bleeding. We have slowly started to recapture our old markets as orders have started pouring in. The sale of the saris during the just concluded festival was better by at least 25 percent as compared to last year,” Das told Al Jazeera.

Shantipur is home to more than 100,000 weavers and traders and is regarded as the hub of the sari business in eastern India. The town and surrounding areas in Nadia district are famous for their handloom weaving industry, which produces a fine variety of saris, including the highly popular Shantipur cotton sari.

Nearby areas of Hooghly and Murshidabad district are also famous for their cotton saris, and these are sold both locally and across the country as well as exported to Greece, Turkiye and other countries.

Sanjay Karmakar, 40, a wholesale trader of cotton saris in Nadia district, is also happy with the ban.

“The local women prefer to buy Bangladeshi saris as they come in attractive packaging and the fabric used there is slightly superior to ours,” he said.

That, coupled with younger women choosing leggings, tunics and other modern clothes over traditional saris, had been pinching sales.

Santanu Guha Thakurta, 62, a fashion creator, told Al Jazeera that Indian weavers and traders would benefit immensely from the import restrictions on Bangladesh. That also shut down cheap knockoffs of the more expensive designs.

“The restrictions came at the right time, just before the onset of the festival season and that immensely benefited the industry.”

“ Well, the shutdown melodrama continues.”

That’s how, with the verbal equivalent of a sigh, Senator John Kennedy of Louisiana summed up the third day of the United States government shutdown.

On Friday, the US Senate reconvened before a weekend recess to vote yet again on a continuing resolution that would keep the government funded through November 21.

Republicans have touted the resolution as a “clean” budget bill, maintaining the status quo. But Democrats have said they will refuse to consider any bill that does not consider healthcare spending.

By the end of the year, subsidies under the Affordable Care Act are slated to expire, a fact expected to cause insurance premiums to spike for many Americans. And Democrats have called on Republicans to reconsider cuts to Medicaid, the government insurance programme for low-income households, following the passage of a bill earlier this year that narrows its requirements.

But the result has been an impasse on Capitol Hill, with both parties exchanging blame and no resolution in sight. Frustration was visible on both sides.

“This shutdown is bone-deep, down-to-the-marrow stupid,” Kennedy said from the Senate floor.

For a fourth time on Friday, Democrats rejected the Republicans’ proposal, which previously passed the House of Representatives along party lines.

Only three senators splintered from the party caucus: Democrat Catherine Cortez Masto of Nevada, Democrat John Fetterman of Pennsylvania and Independent Angus King of Maine.

On the Republican side, Senator Rand Paul also refused to vote alongside members of his party. His concern, he said, was how the spending would contribute to federal debt.

The result was a vote of 54 to 44 in the 100-seat Senate chamber, far short of the 60 votes Republicans need to overcome a Democratic filibuster to scuttle the bill.

As a counterproposal, Democrats put forward a bill that would see more than $1 trillion dedicated to healthcare spending. But that too floundered in a Senate vote.

Finger-pointing on Capitol Hill

In a news conference afterwards, Senate Minority Leader Chuck Schumer said the deadlock could only be broken if the Republicans changed their tactic and negotiated on the question of healthcare.

“Today, we saw the Republicans run the same play, and they got the same result. The question is: Will they change course?” he told reporters.

Schumer accused Republicans of having “wasted a week” with four votes that ended in the same result.

“ My caucus and Democrats are adamant that we must protect the healthcare of the American people,” he said. “ Instead of trying to come to the table and negotiate with Democrats and reopen the government, the White House and fellow Republicans have vowed to make this a ‘maximum pain’ shutdown.”

Republican leaders, meanwhile, accused the Democrats of attempting to bog down the process instead of proceeding with the status quo.

House Speaker Mike Johnson also argued that programmes like Medicaid were in desperate need of reform.

“Medicaid has been rife with fraud and abuse, and so we reformed it. Why? To help provide more and better health services for the American people,” he said at a news conference. “ We had so many people on Medicaid that never were intended to be there.”

Johnson accused Schumer of attempting to appeal to the progressive branch of the Democratic Party, in anticipation of a 2028 primary for his Senate seat: “ He’s got to show that he’s fighting Republicans.”

Both sides of the aisle, however, expressed sympathy for the federal workers caught in the middle of the shutdown.

The Congressional Budget Office has estimated that nearly 750,000 people are facing furloughs each day the shutdown continues. Others are required to keep working without pay.

The total compensation for the furloughed employees amounts to roughly $400m per day, according to the budget office’s statistics. Thanks to a 2019 law, the Government Employee Fair Treatment Act, federal employees will eventually receive backpay – but only after the shutdown concludes.

Pressure tactics

In an effort to force the Democrats to pass the continuing resolution, Johnson issued a notice on Friday afternoon that the House of Representatives would not return to session until October 14 at the earliest.

Instead, his memo called on representatives to engage in a “district work period”, away from the US capital.

That announcement was designed to place pressure on the Senate to act on the continuing resolution the House had already passed. Prior to Johnson’s announcement, the House had been expected to resume its work in the Capitol on October 7.

Meanwhile, John Thune, the Senate majority leader, indicated he would be willing to weigh the Democrats’ concerns about healthcare, but only once the government was reopened.

Still, he made no guarantee that the expiring healthcare subsidies would be re-upped if the Democrats did relent.

“ We can’t make commitments or promises on the COVID subsidies because that’s not something that we can guarantee that there are the votes there to do. But what I’ve said is I’m open to having conversations with our Democrat colleagues about how to address that issue,” Thune said.

“ But that can’t happen while the government is shut down.”

Republican President Donald Trump, meanwhile, has threatened to use the shutdown as an opportunity to slash the federal workforce and cut programmes that benefit Democratic strongholds.

Already this week, his administration has said it is suspending $18bn in New York City infrastructure projects, including for tunnels under the Hudson River, as well as about $8bn in clean energy initiatives.

But on Friday, Russ Vought, Trump’s director for the US Office of Management and Budget, announced another major city would be targeted for cuts: Chicago, Illinois.

Vought posted on social media that two Chicago infrastructure projects, worth $2.1bn, “have been put on hold to ensure funding is not flowing via race-based contracting”.

At a news briefing afterwards, White House Press Secretary Karoline Leavitt said a reduction in the federal workforce was also in the works, with Vought meeting with agency leaders to discuss layoffs.

“Maybe if Democrats do the right thing, this government shutdown can be over. Our troops can get paid again. We can go back to doing the business of the American people,” Leavitt said.

“But if this shutdown continues, as we’ve said, layoffs are an unfortunate consequence of that.”

But Democratic leaders dismissed those threats as pressure tactics meant to distract from the key question of healthcare.

In his remarks, Schumer argued that healthcare was a top priority for Republican districts too, and that Republican leaders should respond accordingly.

“It’s simple,” Schumer said. “ They can reopen the government and make people’s healthcare more affordable at the same time.”

The lawsuit claims Trump does not have the authority to override the law that created the H-1B visa programme.

A coalition of unions, employers and religious groups has filed a lawsuit seeking to block United States President Donald Trump’s bid to impose a $100,000 fee on new H-1B visas for high-skilled foreign workers.

The lawsuit filed in federal court in San Francisco on Friday is the first to challenge Trump’s proclamation issued last month announcing the fee.

The United Auto Workers union, American Association of University Professors and other plaintiffs say Trump’s power to restrict the entry of certain foreign nationals does not allow him to override the law that created the H-1B visa programme.

The programme allows US employers to hire foreign workers in speciality fields, and technology companies in particular rely heavily on workers who receive H-1B visas.

Critics of H-1Bs and other work visa programmes say they are often used to replace American workers with cheaper foreign labour. But business groups and major companies have said H-1Bs are a critical means to address a shortage of qualified American workers.

Employers who sponsor H-1B workers currently typically pay between $2,000 and $5,000 in fees, depending on the size of the company and other factors.

Trump’s order bars new H-1B recipients from entering the US unless the employer sponsoring their visa has made an additional $100,000 payment. The administration has said the order does not apply to people who already hold H-1B visas or those who submitted applications before September 21.

Trump in his unprecedented order invoked his power under federal immigration law to restrict the entry of certain foreign nationals that would be detrimental to the interests of the US.

He said that high numbers of lower-wage workers in the H-1B programme have undercut its integrity and that the programme threatens national security, including by discouraging Americans from pursuing careers in science and technology. He said the “large-scale replacement of American workers” through the H-1B programme threatens the country’s economic and national security.

‘Pay to play’

The plaintiffs argue that Trump has no authority to alter a comprehensive statutory scheme governing the visa programme and cannot, under the US Constitution, unilaterally impose fees, taxes or other mechanisms to generate revenue for the US, saying that power is reserved for Congress.

“The Proclamation transforms the H-1B program into one where employers must either ‘pay to play’ or seek a ‘national interest’ exemption, which will be doled out at the discretion of the Secretary of Homeland Security, a system that opens the door to selective enforcement and corruption,” the lawsuit said.

The groups argue that agencies, including the US Department of Homeland Security’s US Citizenship and Immigration Services and US Department of State, likewise adopted new policies to implement Trump’s proclamation without following necessary rulemaking processes, and without considering how “extorting exorbitant fees will stifle innovation”.

The H-1B programme offers 65,000 visas annually to employers bringing in temporary foreign workers in specialised fields, with another 20,000 visas for workers with advanced degrees. The visas are approved for a period of three to six years.

India was by far the largest beneficiary of H-1B visas last year, accounting for 71 percent of approved visas, while China was a distant second at 11.7 percent, according to government data.

Air Canada has announced it has begun serving complimentary beer, wine and snacks to economy passengers on every flight across its network, in a major win for those who love free stuff

“Two pints of lager and a packet of crisps please.”

No longer will this request be met with an eye-watering bill when made at 30,000 feet, at least on one airline.

Air Canada has announced it has begun serving free beer, wine and snacks to economy passengers on every flight across its network.

That is a significant change, as previously the airline only served free alcohol and food to economy passengers on long-haul flights.

As generous as it may sound, the policy is designed to be a cost-effective way to keep passengers flying with Air Canada. Scott O’Leary, vice president of loyalty and product, explained the rationale in a statement.

READ MORE: Definitive guide to which passengers get the middle armrests on a planeREAD MORE: ‘I’m an airline worker and passengers should only ever use one type of suitcase’

“Food and beverage tend to have a disproportionate impact on customer satisfaction. As part of our commitment to elevating the onboard experience, we’re delighted to introduce even more exciting new options to our menus,” he said.

“These upgrades offer something for everyone and proudly showcase Canadian brands so that our customers can sit back, relax and kick-start their travels no matter where they’re going.”

What customers can expect to get for free on economy flights varies significantly.

Unsurprisingly, budget carriers such as Wizz Air, Ryanair and easyJet provide nothing for free.

Airlines offering free drinks on short-haul flights include KLM, which offers a free snack and drink on all European flights, and LOT Polish Airlines, providing free beer, wine, or juice on their short-haul routes.

Free water and snacks are also typically available with British Airways, though the extent of the service can vary by division and route. For other airlines like Lufthansa and Swiss, only a complimentary bottle of water and perhaps a small snack are provided.

For short and medium-haul flights within Europe, Lufthansa offers a paid “Onboard Delights” service where passengers can purchase food and drinks.

Air France offers free food on many of its flights. While a “buy on board” system is being tested on some routes, most flights still provide complimentary meals, snacks, and beverages, depending on the flight duration and class. Passengers on short and medium-haul flights can expect a free sandwich, pastry, or snack, along with a drink.

On short and mid-haul TUI flights (less than seven hours), a variety of hot and cold snacks and drinks are available for purchase from the onboard café.

Most full-service airlines do still include meals and drinks on long-haul routes. Think flights to the US, Asia, or the Caribbean.

• British Airways: Even on the cheapest economy fare, you can get complimentary meals, snacks, and drinks.
• Virgin Atlantic: Offers free meals and drinks, and they’re known for a decent veggie option.
• Emirates, Qatar Airways, Singapore Airlines: All offer full meal service in economy, and it’s usually good quality. You’ll get at least two meals plus snacks and unlimited drinks.
• Turkish Airlines: Generally provides free meals on their international flights, including both economy and business class. On longer flights, passengers are typically offered a choice of main courses, side dishes, bread, and dessert. Drinks are also complimentary on all flights.
• Air France: On long-haul flights, an extensive selection of meals is offered, including hot dishes, and passengers can also purchase a la carte meals in advance.
• American Airlines: Meals and drinks are typically included on international flights, including wine and beer
• United: United Airlines offers complimentary food on most flights, especially on longer distances and for higher class tickets.
• Air Canada: Generally offers complimentary meals and snacks on international flights. On flights longer than 2 hours, you’ll typically receive a complimentary meal and beverage service, including salad, warm bread, a hot entrée, and dessert.
• Tui: On long-haul flights (seven hours or more), a complimentary meal is included. Additional drinks and snacks can still be purchased on these flights as well
• Lufthansa: Lufthansa generally provides complimentary meals and drinks on long-haul flights
• KLM: Provides complimentary meals and drinks on most of its flights. The specific offerings vary depending on the flight duration and class of travel, but generally include snacks and drinks on shorter flights and more substantial meals on longer routes.

Latest move underscores efforts to normalise ties and draw closer in wake of Trump’s policies, stiff tariffs.

India and China plan to resume direct flights this month between some of their cities after a five-year suspension as relations between the two countries begin to thaw, Indian authorities have announced.

The closer ties come in the face of the United States President Donald Trump administration’s aggressive trade policies.

Direct flights between the two countries were suspended during the COVID pandemic in 2020 and did not resume as Beijing and New Delhi engaged in prolonged border tensions.

On Thursday, India’s embassy to China said in a post on social media platform WeChat that flights between designated cities will resume by late October, subject to commercial carriers’ decisions.

The resumption is part of the Indian government’s “approach towards gradual normalization of relations between India and China,” the embassy added.

India’s largest carrier IndiGo announced on Thursday that it would resume flights from Kolkata, India, to Guangzhou, China, from October 26.

The resumption comes after Indian Prime Minister Narendra Modi visited China for the first time in seven years to attend last month’s meeting of regional security bloc, the Shanghai Cooperation Organisation.

There, Modi and Chinese President Xi Jinping agreed that India and China were development partners, not rivals, and discussed ways to strengthen trade ties amid global tariff uncertainty fuelled by Trump.

The US president raised the tariff rate on Indian imports to a stiff 50 percent last month, citing the nation’s continuing purchases of Russian oil. He also urged the European Union to slap 100 percent tariffs on China and India as part of his efforts to pressure Moscow to end its war in Ukraine.

Relations between China and India plummeted in 2020 after security forces clashed along a disputed border in the Himalayan mountains. Four Chinese soldiers and 20 Indian soldiers were killed in the worst violence in decades, freezing high-level political engagements.

The congressional setback arrives as Milei’s political party faces slumping popularity headed into a midterm election.

Argentina’s struggling President Javier Milei has suffered a new setback as Congress overturned his vetoes of laws increasing funding for public universities and for paediatric care.

On Thursday, senators invalidated both vetoes, which had already been rejected by the Chamber of Deputies, bringing to three the number of laws upheld by Congress despite vehement opposition from the budget-slashing Milei.

Milei, who has implemented deep austerity policies to reduce the size of government, had said the new spending would jeopardise Argentina’s fiscal balance.

The Senate’s vote comes as the United States-backed Milei struggles to end a run on the national currency, the Argentinian peso, in the run-up to the crucial October 26 midterm elections.

The 54-year-old right-winger, in power since December 2023, has been on the ropes since his party’s trouncing by the centre-left in Buenos Aires provincial polls last month.

Those elections, seen as a bellwether ahead of the midterms, shredded his aura of political invincibility and sent markets into a tailspin.

“There’s a sensation of disenchantment and anger with the impact of the cutbacks,” said Sebastian Halperin, a political consultant in Buenos Aires.

He added that Milei had failed to build alliances with governors who influence how their province’s legislators vote in Congress.

Last week, the US government announced it was in talks with Argentina on a $20bn swap line aimed at shoring up the peso.

US President Donald Trump sought to buoy his close ally at talks in New York last week, saying: “He’s doing a fantastic job.”

The two are expected to meet in October as Milei seeks to secure a credit swap line from the US.

Analysts say, however, the president still needs a strong result in the midterms to avoid compromising the progress he has made in steadying Argentina’s economy.

After rallying briefly, the peso slumped again this week over market uncertainty about the amount and extent of the US financial help on offer.

European Union leaders are considering a “reparations plan” that would use frozen Russian state assets to provide Ukraine with a $164bn loan to help fund its reconstruction after the war with Russia ends.

Leaders expressed a mixture of support and caution for the plan on Wednesday as they met in the Danish capital, Copenhagen, days after drones were spotted in Denmark’s airspace, prompting airport closures. While the drones in Denmark were not formally identified as Russian, other European countries, including Poland, Romania and Estonia, have accused Russia of drone incursions into their airspace in September.

“I strongly support the idea,” Danish Prime Minister Mette Frederiksen said. Swedish Prime Minister Ulf Kristersson also said he was “very much in favour” of the plan. Others said there could be legal complications, however.

Here is what we know about Europe’s “reparations plan”, how it may work and what the response from Russia is likely to be.

What is Europe’s ‘reparations plan’?

The reparations plan was first outlined by European Commission President Ursula von der Leyen in mid-September, and backing for it has grown as United States financial support for Ukraine wanes.

During his 2024 presidential campaign, US President Donald Trump promised voters he would pull the US back from providing high levels of financial and military aid to Ukraine.

Since the beginning of his term in January, Trump has made it clear the US will take a back seat in terms of providing financial support and security guarantees to Ukraine, indicating Europe should fill the gap instead.

Europe’s plan would use Russian assets frozen in European banks as collateral for a 140-billion-euro ($164.4bn) loan to Ukraine. Repayments for the loan would be recouped via war reparations from Russia, but the loan would also be guaranteed either in the EU’s next long-term budget or by individual EU member states.

“We need a more structural solution for military support,” von der Leyen said on Tuesday. “This is why I have put forward the idea of a reparations loan that is based on the immobilised Russian assets.”

How much in frozen Russian assets does Europe hold?

About $300bn in Russian Central Bank assets have been frozen by the US and European countries since Russia’s invasion of Ukraine in February 2022.

Most of this – $246.9bn – is held in Europe, of which $217.5bn – the vast majority in cash – is held by Euroclear, a Belgium-based capital markets company.

On June 30, Euroclear reported the Russian sanctioned assets on its balance sheet generated $3.2bn in interest during the first half of 2025, a drop from the $4bn in interest earned over the same period last year.

What are the challenges to this plan?

Under international law, a sovereign country’s assets cannot simply be confiscated. Hence, loaning this money to Ukraine would be an infringement of Moscow’s sovereign claim over its central bank assets.

Since most of the assets are held in Belgium, the country has asked for the plan to be fleshed out in case it is required to return the assets to Russia.

“I explained to my colleagues yesterday that I want their signature saying, ‘If we take Putin’s money, we use it, we’re all going to be responsible if it goes wrong,’” Belgian Prime Minister Bart De Wever told reporters in Copenhagen on Thursday.

On Wednesday, von der Leyen said: “It’s absolutely clear that Belgium cannot be the one who is the only member state that is carrying the risk. The risk has to be put on broader shoulders.”

Are any European leaders hesitant about this plan?

Yes. Besides De Wever, other European leaders have expressed hesitation or have asked their fellow leaders to work out more details of the plan before they agree to it.

Dutch Prime Minister Dick Schoof said the proposal should be considered very carefully, given the legal and financial risks that could arise.

Others also signalled caution. “I think that’s a difficult legal question,” Luxembourg Prime Minister Luc Frieden told reporters. “You can’t just take over assets that belong to another state so easily.”

Frieden added: “There are now other proposals on the table, but these also raise a whole host of questions. I would like to have answers to these questions first. Among other things, how would such a loan be repaid? What would happen if Russia did not repay these reparations in a peace treaty?”

Is the plan likely to go ahead?

Experts said European leaders would likely have to find a way to make the plan viable as the prospects of further US aid for Ukraine dry up.

“It is going to happen because with the US walking away, Europe is left with $100bn-plus annual funding needs for Ukraine,” Timothy Ash, an associate fellow in the Russia and Eurasia programme at Chatham House, told Al Jazeera.

Ash explained that the bigger challenge for Europe would be to not go ahead with the plan if it means leaving Ukraine underfunded generally and placing it at higher risk of losing the war with Russia. “Risks to Europe would then be catastrophic,” he said, including the prospect of tens of millions of Ukrainians migrating west into Europe.

If a Ukrainian loss in the war becomes more likely, European nations would be forced to ramp up defence spending to 5 percent of their gross domestic products (GDPs) much faster than expected.

In June, members of NATO pledged to increase their defence spending to 5 percent of their GDPs by 2035.

Such an acceleration “would mean higher budget deficits, higher borrowing costs, more debt, less growth and a weaker Europe and euro”, Ash said.

How has Russia responded?

Moscow has rebuked the EU plan, calling it a “theft” of Russian money.

“We are talking about plans for the illegal seizure of Russian property. In Russia, we call that simply theft,” Kremlin spokesman Dmitry Peskov told reporters on Wednesday.

Peskov said anyone involved in seizing Russian assets “will be prosecuted in one way or another. They will all be called to account.”

He added: “The boomerang will very seriously hit those who are the main depositories, countries that are interested in investment attractiveness.”

Ash said Russia could take legal action against European countries if the plan goes ahead. However, “it would have to lift its own sovereign immunity to be able to launch any such legal action. And a legal action by Russia would take years – decades to conclude.”

Russia is protected by sovereign immunity, which is a legal principle shielding foreign governments from being sued in courts outside their own country. If Russia wants to legally pursue this, it would need to waive this immunity, which, in turn, would mean Russia could also be sued or tried in a foreign country.

Ash added that another course of action Russia could take would be to seize Western assets under its jurisdiction, but this also does not come without challenges. “Russia has 10 times more assets in the West than vice versa,” Ash said. “It’s just more vulnerable through this channel.”

How much in Western assets does Russia hold?

Moscow said the value of all foreign assets it holds is comparable to the frozen Russian reserves held in the West. Citing data from January 2022, Russia’s state-run RIA news agency reported there were about $288bn of assets in Russia that could potentially be seized by Moscow.

However, Russian Central Bank records from 2022 show there were $289bn in “derivative and other foreign investments” in Russia. By the end of 2023, these foreign assets had dropped in value to $215bn.

Ash explained: “Those assets are all foreign assets – not just Western. [They include] Chinese, Indian, Middle East assets. And most of those assets are private – not state.”

The U.S. economy will be hampered by the Trump administration’s tariffs in the coming months, which along with interest rate cuts could lead to a “stagflation-lite” scenario of modestly elevated inflation and unemployment, according to the UCLA Anderson Forecast released Wednesday.

The fourth-quarter estimate also predicts that rising layoffs could lead to a recession, and if President Trump is successful in exerting more control over the Federal Reserve, a “full blown stagflation scenario becomes a more significant risk.”

“This forecast is being produced at a time when more extreme scenarios have become increasingly plausible, even though they do not yet represent our baseline outlook,” states the report by Clement Bohr, senior economist at the forecast.

UCLA’s report notes that the labor market “deteriorated notably” in June while inflation pivoted away from a path of “gradual normalization” onto a rising trajectory.

The quarterly forecast does not take into account the government shutdown that began Wednesday that could results in thousands of layoffs, but predicts third-quarter GDP growth will come in at just 1% on a seasonably adjusted basis, and it will weaken further as the full cost of the tariffs takes hold.

It expects growth to recover in the middle of next year and reach 2% by the fourth quarter, remaining there throughout 2027.

Driving the stagflation prediction is an effective tariff rate of about 11%, with the risk of future levies on pharmaceuticals and the potential lack of a resolution of the China trade dispute. The report notes the political pressure on Federal Reserve Chairman Jerome Powell and the decision by the bank to cut the federal funds rate by a quarter point in September. UCLA predicts a similar rate cut this month.

Trump’s “big beautiful” budget reconciliation bill passed in July, which included $703 billion in temporary tax cuts over the next four years starting in 2026, also will provide substantial stimulus. The Consumer Price Index is expected to peak at 3.6% in the first quarter of next year before easing.

However, the economy will be held back by a tightening labor supply caused by retiring baby boomers and restrictive immigration policies. The unemployment rate has crept up to 4.3% and is expected to peak at 4.6% early next year.

Also Wednesday, closely watched ADP Research released figures showed private-sector payrolls decreased by 32,000 in September with job growth slowing across many industries.

The billions of dollars being invested in artificial intelligence by large technology firms has helped prop up the economy, the forecast noted, which should result in productivity gains — but the capital expenditures should tail off as a “trough of disillusionment” sets in when revenue gains don’t meet expectations.

The report also expects consumer consumption to weaken following a surge in electric-vehicle purchases in the third quarter due to the expiration of federal tax credits last month.

Mark Zandi, chief economist at Moody’s Analytics, said if the government shutdown lasts a week or two it won’t have a “meaningful economic impact.” However, if it lasts for a month or more and is accompanied by mass federal layoffs, it would have a profound effect on the economy, Zandi said.

“It would wreak havoc on the financial markets as global markets and investors begin to wonder if we can govern ourselves,” he said. “That would mean higher interest rates and lower stock prices.”

The United States Supreme Court says it will hear arguments over President Donald Trump’s efforts to remove Federal Reserve Governor Lisa Cook from her post. The court’s announcement means Cook will stay in the job for now.

The high court announced the decision on Wednesday.

The White House has been trying to remove Cook in the first-ever bid by a president to fire a Fed official, an unprecedented challenge to central bank independence.

The justices declined to immediately decide a Department of Justice request to put on hold a judge’s order temporarily blocking the Republican president from removing Cook, an appointee of Democratic former President Joe Biden, while litigation over the termination continues in a lower court.

The justices said they would hear the case in January.

In creating the Fed in 1913, Congress passed a law called the Federal Reserve Act, which included provisions to shield the central bank from political interference, such as allowing governors to be removed by a president only “for cause”, although the law does not define the term or establish procedures for removal. The law has never been tested in court.

Washington, DC-based US District Judge Jia Cobb on September 9 ruled that Trump’s claims that Cook committed mortgage fraud before taking office, which Cook denies, likely were not sufficient grounds for removal under the Federal Reserve Act.

Trump on August 25 said he was removing Cook from the Fed’s Board of Governors, citing allegations that before joining the central bank in 2022, she falsified records to obtain favourable terms on a mortgage. Her term is set to expire in 2038.

Cook, the first Black woman to serve as a Fed governor, sued Trump soon after. Cook has said the claims made by Trump against her did not give the president the legal authority to remove her and were a pretext to fire her for her monetary policy stance.

The US Court of Appeals for the District of Columbia Circuit in a 2-1 ruling on September 15 denied the administration’s request to put Cobb’s order on hold.

Expansive view of presidential powers

In a series of decisions in recent months, the Supreme Court has allowed Trump to remove members of various federal agencies that Congress had established as independent from direct presidential control despite similar job protections for those posts. The decisions suggest that the court, which has a 6-3 conservative majority, may be ready to jettison a key 1935 precedent that preserved these protections in a case that involved the US Federal Trade Commission.

But the court has signalled that it could treat the Fed as distinct from other executive branch agencies, noting in May in a case involving Trump’s dismissal of two Democratic members of federal labour boards that the Fed “is a uniquely structured, quasi-private entity” with a singular historical tradition.

Trump’s bid to fire Cook reflects the expansive view of presidential power he has asserted since returning to office in January. As long as the president identifies a cause for removal, Cook’s sacking is within his “unreviewable discretion”, the Department of Justice said in a September 18 filing to the Supreme Court.

“Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herself – and refuses to explain the apparent misrepresentations,” the filing stated.

Cook’s lawyers told the Supreme Court on September 25 that granting Trump’s request, “would eviscerate the Federal Reserve’s longstanding independence, upend financial markets and create a blueprint for future presidents to direct monetary policy based on their political agendas and election calendars”.

A group of 18 former US Federal Reserve officials, Treasury secretaries and other top economic officials who served under presidents from both parties also urged the Supreme Court not to let Trump fire Cook.

The group included the past three Fed chairs, Janet Yellen, Ben Bernanke and Alan Greenspan. In a brief to the court, they wrote that allowing this dismissal would threaten the Fed’s independence and erode public confidence in it.

Cook took part in the Fed’s highly anticipated two-day meeting in Washington, DC, in September, at which the central bank decided to cut interest rates by a quarter of a percentage point as policymakers responded to concerns about weakness in the job market. Cook was among those voting in favour of the cut.

Pressure on Fed

Concerns about the Fed’s independence from the White House in setting monetary policy could have a ripple effect throughout the global economy.

The case has ramifications for the Fed’s ability to set interest rates without regard to the wishes of politicians, widely seen as critical to any central bank’s ability to function independently and carry out tasks such as keeping inflation under control.

Trump this year has demanded that the Fed cut rates aggressively, berating Fed Chair Jerome Powell for his stewardship over monetary policy as the central bank focused on fighting inflation. Trump has called Powell a “numbskull,” “incompetent” and a “stubborn moron”.

The United States federal government shut down at 12:01am East Coast time (04:01 GMT) on Wednesday after Congress failed to pass a new spending bill, forcing operations considered inessential to close.

President Donald Trump has threatened to use the budget deadlock to push through mass layoffs of federal employees.

Democrats and Republicans remain divided over spending priorities as Democrats push to protect healthcare, social programmes and foreign aid while Republicans demand cuts.

This is not the first time Washington has faced such a standoff. The graphic below shows every US funding gap and government shutdown since 1976, including how long each lasted and under which administration it occurred.

What is a government shutdown?

A government shutdown happens when Congress does not agree on a budget, so parts of the federal government have to close until a spending plan is approved.

Shutdowns tend to happen in October because the government’s fiscal year runs from October 1 to September 30.

How many times has the government shut down?

The current budget process was established in 1976. Since then, the government has had 20 funding gaps, resulting in 10 shutdowns.

A funding gap occurs whenever Congress misses the deadline to pass a budget or a stopgap spending bill (also called a continuing resolution), leaving the government without legal authority to spend money.

• A single shutdown can involve multiple funding gaps if temporary funding measures expire before a long-term agreement is reached.
• A shutdown happens only if government operations actually stop because of that funding gap.

Before the 1980s, funding gaps did not usually lead to shutdowns, and agencies kept operating, assuming funding would be restored soon.

After 1980, Attorney General Benjamin Civiletti issued legal opinions stating that, under federal law, agencies may not spend money without congressional approval. Only essential services – such as national security, air traffic control and law enforcement – could continue.

Since 1982, with this new legal basis in place, funding gaps have more often resulted in full or partial government shutdowns until Congress resolves the standoff.

When was the last government shutdown?

The last government shutdown occurred in December 2018 and January 2019 after President Donald Trump, then in his first term, and Democratic politicians hit an impasse over the president’s request for $5bn in funding for a wall on the US-Mexico border, a demand the Democrats opposed.

When was the longest shutdown?

The last shutdown was also the longest in US history, lasting 35 days from December 22, 2018, to January 25, 2019, when Trump announced he had reached a tentative deal with congressional leaders to reopen the government for three weeks while negotiations on the border wall continued.

What happens during a shutdown?

During a government shutdown, nonessential federal services are halted or reduced, and many government employees are furloughed, or placed on unpaid leave.

Meanwhile, essential personnel – such as military service members, law enforcement officers and air traffic controllers – are required to keep working, often without pay until funding is restored.

How are government shutdowns resolved?

Shutdowns are typically resolved when Congress passes a continuing resolution, which provides short-term funding while negotiations for a longer-term budget continue.

Since 1990, every shutdown has ended through the passage of a continuing resolution.

Which services are halted?

A shutdown primarily affects nonessential federal employees as well as people and businesses that rely on government services.

The federal government is the nation’s largest employer. As of November, it had a little more than 3 million workers – about 1.9 percent of the civilian workforce – according to Bureau of Labor Statistics data reported by the Pew Research Centre.

The Congressional Budget Office estimated that if funding lapses in fiscal year 2026, about 750,000 federal employees could be furloughed each day, and their lost pay would add up to about $400m daily. The exact number of furloughed workers could change over time because some agencies might increase layoffs the longer a shutdown continues while others could bring some employees back.

Past shutdowns have affected numerous services and agencies, including:

• National parks and monuments
• Federal museums
• Federal research projects
• Processing of certain government benefits
• IRS taxpayer services

Which services are still in operation?

Even during a shutdown, many core government functions remain in operation. Some continue because they are classified as essential for public safety and welfare while others are funded separately from the annual budget process through mandatory or self-sustaining programmes. Examples include:

• Social Security and Medicare benefits
• The military and federal law enforcement
• US Postal Service
• Air traffic control
• US Passport Agency

Despite Western sanctions, Russia’s military spending has fuelled its war economy. Three years into the war in Ukraine, growth is stalling, energy revenues are plunging, and the budget deficit is widening.

To shore up state coffers, Russia is raising the value-added tax from 20 percent to 22 percent, among other measures. The Ministry of Finance says funds will mainly cover defence and security spending.

The plan came a day after United States President Donald Trump said Russia was in “big economic trouble”, but is it?

Can the United Kingdom’s Labour Party deliver on its economic promises?

Plus, will the Africa-US trade pact, AGOA, be renewed?

ADVERTISEMENT

It’s not only European tourists traveling in the United States and finding themselves in front of closed museum doors or national park gates.

Because the US is so central to the global economy, European businesses could feel negative effects of a US government shutdown too.

In fact, they should get ready for a rough ride that will only become more painful the longer the gridlock in Washington lasts.

So, why should corporate Europe be worried about public employees on the other side of the Atlantic not being able to work?

Well, the shutdown halts or scales back many federal operations like providing loans or permits and disrupts the work of government agencies that provide oversight, slowing down economic activity.

What makes this more significant is its timing. This year, the US economy is already navigating slower growth, persistent inflation pressures and increasing financial insecurity.

The shutdown is adding to this insecurity and has the potential to trigger a chain reaction of economic consequences.

Take European trade businesses. Already rattled by the tariff chaos, they rely on consistent and predictable market conditions to plan their production, allocate resources and meet their customers’ needs.

Even a slight slowdown in economic activity would lead to lower US imports, which would reduce demand for European companies, whose growth, revenue and profitability would in turn be affected.

European imports arriving in America will meet less government staff in ports and customs who handle administrative and regulatory tasks associated with importing and exporting goods.

As a result, there will be delays which can extend the time it takes for goods to reach their destinations, disrupting delivery schedules.

The delays can have cascading effects on supply chains that rely on precise timing to function efficiently. This may lead to unexpected costs for expedited shipping and penalties for missed delivery deadlines.

In addition, there is the danger from a potential halt in export license approvals.

European companies need these approvals – or their renewals – to conduct their business operations in the US altogether.

“Companies will be frozen, they can’t get anything approved, no permits or licenses, can’t sell corporate debt in the US,” a lawyer in the business of negotiating transatlantic deals for multinational corporate clients told Euronews.

“A government shutdown sends home the people who execute regulations, but the regulations themselves remain – and remain to be complied with.”

This regulatory uncertainty can leave European exporters in a state of limbo, unsure of their ability to continue their activities with the US market in the short-term.

Look especially for sectors that rely on US demand such as machinery, automotive components or chemicals.

Those companies might see downward stock market swings as investors react to uncertainty in the US.

Speaking of financial markets. Prolonged uncertainty in the US could lead to rising interest rates on US government bonds, as investors would consider them to be higher risk.

That would lead to higher rates elsewhere in the world.

In Europe, for example, this could depress stock markets, increase the cost of financing public deficits, and reduce overall demand due to the higher cost of credit.

The rise in rates would increase the risk of default by over-indebted borrowers, and therefore of a financial crisis.

As the lack of a budget agreement in Washington would compromise the financing of US support for certain countries, the risks of geopolitical instability would increase, which would depress business investment and intensify the decline in demand already affected by inflation.

Economists estimate that a two-week US government shutdown would have a negative impact on EU GDP of €4 billion. If the shutdown lasted for 8 weeks, the impact would increase to €16 billion.

Whether it will really come to this is in the hands of politicians in Washington.

What is at stake is nothing less than America’s reputation as a global economic anchor of stability.

China is rolling out a new visa aimed at attracting foreign talent in the fields of science and technology.

The K visa comes into effect from Wednesday, following a proclamation last month by the State Council, China’s cabinet.

The visa has attracted particular attention in light of United States President Donald Trump’s tightening of the eligibility rules for the H-1B, which Silicon Valley heavily relies on to recruit skilled labour from overseas.

What is the goal of the K visa, and how does it work?

The Chinese government has cast the visa as part of its efforts to attract foreign talent to boost the country’s competitiveness in science and technology.

Ministry of Foreign Affairs spokesman Guo Jiakun on Tuesday said the visa’s purpose was to “promote exchanges and cooperation” between science, technology, engineering and mathematics (STEM) talent from China and other countries.

The visa is the latest in a series of recent reforms intended to make China more attractive to foreigners, including streamlined visa processing and the introduction of a redesigned permanent residency card.

“From the 1980s to the 2010s, China used to lose talent to developed countries such as the United States,” Zhigang Tao, a professor of strategy and economics at Cheung Kong Graduate School of Business in Beijing, told Al Jazeera.

“Now the task is to keep local talent and also attract some global talent.”

Chinese officials have said the K visa, which will be open to graduates of recognised universities and young professionals engaged in STEM-related fields, will offer more flexible conditions than existing options.

The main advantage of the visa is that, unlike previous skilled migrant programmes, it does not require sponsorship by an employer.

However, many key details of the visa remain unclear, including duration of stay and unspecified requirements related to age, educational background and work experience.

Is the K visa likely to attract foreign talent?

Edward Hu, immigration director at consultancy Newland Chase in Shanghai, said there has been strong interest in the visa, with inquiries up more than 30 percent since August.

Hu said there has been particularly strong interest from prospective applicants in India, Southeast Asia, Europe, and the US.

“The K visa fills a gap in China’s talent system by lowering entry barriers for younger STEM talents – complementing the existing R visa, which targets top-tier experts,” Hu told Al Jazeera, referring to the visa as a “strategic move” to position China as a top destination for early-career STEM talent.

The R visa, introduced in 2013, is aimed at “high-level and professional” foreigners who are “urgently needed” by the state, and requires sponsorship by an “inviting organisation”.

Still, China’s drive to expand its talent pool with the K visa faces challenges.

While China has made moves to open to foreigners, the country is still far less internationalised than the US.

Unlike the US, China rarely grants citizenship to foreigners.

While Chinese permanent residency is more feasible to obtain, it is still only granted to a tiny fraction compared with the roughly one million non-US citizens who receive green cards each year.

Chinese work environments also present a language barrier for English-speaking applicants when compared with their Silicon Valley counterparts.

Michael Feller, chief strategist at Sydney-based business consultancy Geopolitical Strategy, said Chinese companies would need to offer English-language roles and “international-style” work schedules to compete with US firms.

“I can’t imagine many foreign graduates interested in the ‘9-9-6’ work-life balance that many Chinese firms are known for,” Feller told Al Jazeera, referring to the 72-hour workweek famously endorsed by Alibaba founder Jack Ma.

What does the K visa have to do with the H-1B?

While China’s drive to recruit talent has cast Trump’s crackdown on immigration in sharp relief, there is no direct link between the introduction of the K visa and his moves to rein in access to the H-1B.

Beijing officially unveiled its visa on August 7, weeks before Trump announced the introduction of a $100,000 fee on H-1B applications, sending shockwaves through the tech sector, especially in India, the source of about 70 percent of visa recipients.

However, many observers have suggested that the US’s inward turn could be to the benefit of other countries seeking to attract talent, including China.

“The K visa is incredible timing from China’s perspective,” Feller said.

“It’s unlikely that Beijing knew that Washington was about to hike the fees for its own H-1B visa category, but it certainly gives the K visa added impetus in the global war for talent.”

Hu of Newland Chase said he expected the shift in policy around the H-1B to “significantly boost” the appeal of the K visa, “positioning it as a timely alternative for affected talent”.

“The K visa offers a low-cost, sponsor-free pathway – aligning with the global surge in STEM talent demand and making China a more accessible option,” he said.

The United States government is set to shut down unless Congress passes an appropriations bill to fund its operations.

Without this legislation, federal agencies will be forced to suspend nonessential activities starting on Wednesday at 12:01am in Washington, DC (04:01 GMT).

Although Republicans control the House of Representatives, Senate and White House, they cannot pass the bill on their own. While Republicans have 53 of the 100 seats in the Senate, 60 votes are needed to advance the bill to a vote.

Republicans have proposed a short-term spending plan, but Democrats have been trying to use the approaching shutdown as leverage. They are pushing to reverse Medicaid cuts included in tax legislation passed in July and extend tax credits for healthcare purchased through government exchanges.

With neither side willing to compromise, a shutdown could have ripple effects across the US economy.

Layoffs and impact on consumer sentiment

The federal government is the nation’s largest employer. In a memo last week, federal agencies were told to prepare layoff notices for programmes that would run out of funds by the deadline and for those not considered a priority by the administration. The memo itself did not explicitly make it clear what those priorities are.

The White House did not respond to Al Jazeera’s request for clarification.

The cuts would be through what is called Reduction In Force, or RIF. But it is unclear whether the cuts, even if the president were to push them through, would last because Trump doesn’t have the power to carry them out, said Daniel Hornung, policy fellow at the Stanford Institute of Economic Policy Research.

“There’s no legal authority that you [the White House] get from shutting down to do RIFs,” Hornung  told Al Jazeera.

RIFs require 30- to 60-days notice if an agency looks to make cuts, so Hornung expected that any cuts made now would be challenged in court.

But even if the job cuts are blocked, it is not clear when that would happen. As a result, those out of work may put off purchases, especially for big-ticket items, according to Michael Klein, professor of international economic affairs at Tufts University in Massachusetts.

“Consumers will start spending less because they’re concerned about what the future looks like,” Klein told Al Jazeera.

“It might be decided [by the court] that it’s not lawful, but that could be a long time. Even if it all gets resolved, those out of a job probably aren’t going to be spending like they otherwise would.”

The memo did not provide a specific number of jobs that could be cut. It comes as more than 150,000 workers are also expected to leave the federal workforce after accepting buyouts this year. Those reductions – as part of the deferred exit programme, which kept workers on payrolls until the end of September – are the largest federal worker job cuts in almost 80 years.

In addition to the permanent layoffs, government workers face furloughs as long as the government is shut down. Workers considered not essential to government operations would stop working until Congress passes budget bills or a stopgap measure.

Delayed jobs report

On Tuesday, the Jobs Openings and Labor Turnover Survey, or JOLTS, released by the Department of Labor showed that hiring declined by 114,000 jobs to 5.1 million in August while job openings increased slightly by 19,000 to 7.2 million. If the government shuts down, the Labor Department would delay the release of key economic reports that gauge the health of the US economy.

On Thursday, it is scheduled to publish weekly jobless claims and on Friday the monthly jobs report, detailing how many jobs were created, in which sectors and the unemployment rate. Normally, the department releases that report on the first Friday of each month unless a holiday intervenes.

The broader labour market has already shown signs of cooling in recent months. In August, the US economy, the largest in the world, added only 22,000 jobs.

Softening labour conditions were one reason the Federal Reserve cut interest rates by 25 basis points in September. A delay in new data could leave the central bank with less information to consider as it weighs whether to cut rates again. Still, a short delay is unlikely to have a major effect because the Fed’s next two-day policy meeting is not until October 28-29.

Hornung believes this shutdown is coming during a fairly unique economic situation that the central bank will need to watch.

“The main risk is that we’re in a precarious spot in the economy anyway. Unlike the prior shutdowns like the prolonged 2018 shutdown, the economy was performing well, the prolonged 2013 shutdown, the economy, was in the midst of a slow but long, gradual recovery,” Hornung said.

“Now the labour market has really weakened. It appears in recent months the risk of inflation remains because of the tariffs. And so, it’s kind of this question of how much can the economy withstand.”

Market impact

Historically, shutdowns have had limited impact on financial markets because investors typically recognise that a shutdown is short-lived.

“Typically in shutdown scenarios, there’s not much impact on either equity markets or in bond markets, mostly because investors tend to look through shutdowns and assess that any temporary slowdown associated with the shutdown will be reversed when the government opens back up,”  Hornung added.

This time, the dynamics are different as the government is planning to slash jobs vs just putting employees on furlough, and this is set against Trump’s broader economic agenda focused on tariffs, which have already pressured businesses.

Markets were relatively flat before the looming shutdown. As of 3:30pm in New York (19:30 GMT), the Dow Jones Industrial Average was up 0.08 percent, the Nasdaq was up 0.06 percent and the S&P 500 was up 0.2 percent.

In the narrow alleys of Old Mosul, once the proud heart of Iraq’s shoemaking industry, the workshops are coming alive again.

After years of conflict and destruction, artisans like 58-year-old Saad Abdul Aal are reviving a tradition that dates back more than 1,000 years.

Shoemaking in Iraq, known as al-qandarjiya, flourished during the Abbasid Caliphate, when Baghdad was a global hub of trade and culture.

Generations of families devoted their lives to transforming rawhide into durable footwear, their skills handed down from master to apprentice.

Before the war, the capital city of Baghdad had more than 250 factories, while Mosul boasted over 50. Iraqi-made shoes were prized for their elegance and resilience – a symbol of national pride.

“Our work began more than 40 years ago,” says Abdul Aal, his hands quick and steady as he trims a piece of leather. “I learned the profession, fell in love with it, and never left it.”

That proud tradition nearly disappeared in 2014, when ISIL (ISIS) seized Mosul. Workshops and factories were bombed, looted, or abandoned.

Abdul Aal lost everything – his equipment, his shop, his workers. “Bombings, destruction,” he recalls. “There was no money even to consider starting again.”

By the end of the war, Mosul’s 50 factories had dwindled to fewer than 10. Thousands of shoemakers were left unemployed, their skills at risk of vanishing.

The turning point came with the International Organization for Migration’s (IOM’s) Enterprise Development Fund-Tameer, which provided grants and training to displaced entrepreneurs and returnees.

For Abdul Aal, this was an opportunity to buy sewing and pressing machines, reopen his workshop, and hire staff.

“It’s not easy, but little by little we are moving forward,” he says.

Today, Abdul Aal produces about four pairs of shoes a day – fewer than before, but enough to keep his business alive. Competition from cheap imports is fierce, but he insists Iraqi craftsmanship still has an edge.

“Our shoes are genuine leather; they last. Imported shoes may appear visually appealing, but they lack quality.

“In contrast, the shoes produced in my factory are visually similar to imported shoes but offer superior quality.

“That is what makes us proud.”

Video platform settles lawsuit filed in response to Trump’s suspension over the January 6, 2021, riot at the US Capitol.

YouTube has agreed to pay $24.5m to settle a lawsuit brought by United States President Donald Trump after the platform suspended his account in response to the January 6, 2021, riot at the US Capitol.

Under the settlement, YouTube, which is owned by Google parent company Alphabet, will contribute $22m on Trump’s behalf to the Trust for the National Mall, a nonprofit that is overseeing a $200m project to construct a ballroom at the White House, a court filing showed on Monday.

The remaining $2.5m will go to other plaintiffs in the case, including the American Conservative Union and American author Naomi Wolf, according to the filing at the US District Court for the Northern District of California.

The settlement does not include any admission of wrongdoing by YouTube, and was reached for the “sole purpose of compromising disputed claims and avoiding the expenses and risks of further litigation”, according to the filing.

The payout is a relatively small sum for YouTube, whose advertising revenues came to nearly $9.8bn in the second quarter of 2025 alone.

The settlement comes after Meta Platforms and X earlier this year agreed to multimillion-dollar payouts to resolve Trump’s claims that he was unduly censored following the January 6 attack, which was carried out by Trump supporters motivated by his false claim that the 2020 election had been “stolen”.

John P Coale, a Trump ally and lawyer who brought the three cases, said he was pleased with the outcome.

“Very much so,” Coale told Al Jazeera. “As is the president and the other plaintiffs.”

Coale said the three cases had netted $60m in total.

“We believe we changed the behaviour,” he said.

After de-platforming Trump over fears his false claims about the 2020 presidential election were driving violence, Big Tech has moved to curry favour with his administration since his return to the White House.

Earlier this month, tech CEOs, including Google’s Sundar Pichai, Meta’s Mark Zuckerberg and Apple’s Tim Cook, lavished praise on Trump at a White House dinner event and expressed support for his administration’s initiatives on artificial intelligence.

Media companies have also paid out large sums to resolve Trump’s legal claims.

Paramount Global said in July that it had agreed to pay $16m to resolve Trump’s claims that CBS News’s 60 Minutes programme had deceptively edited an interview with Vice President Kamala Harris.

In December, ABC News agreed to contribute $15m to Trump’s library to settle claims that he had been defamed by its anchor, George Stephanopoulos.

Timothy Koskie, a postdoctoral researcher at the School of Media and Communications at the University of Sydney, said that YouTube’s settlement dealt a blow to hopes for a consistent approach to content moderation by social media platforms.

“Unfortunately, with the erosion of a rules-based order, we simply can’t expect to get consistent treatment from anyone who seeks to benefit from this administration,” Koskie told Al Jazeera.

“That is going to include an incredibly large swath of companies that we engage with in our daily lives, particularly, but very much not exclusively, the platforms. Rather than removing censorship, this vigorously empowers it in an especially selective vein.”

“Further, the US historically set precedents for many governments around the world,” he added.

The US president pledged a 100 percent tariff for films made outside the country.

United States President Donald Trump has said he wants to levy a 100 percent import tax on movies made outside the country, saying the movie business “has been stolen” from Hollywood and the US.

Posting on his Truth Social platform on Monday, the US president said the tariff was intended to “solve this long time, never ending problem.”

“Our movie making business has been stolen from the United States of America, by other Countries, just like stealing ‘candy from a baby,’” he wrote.

“California, with its weak and incompetent Governor, has been particularly hard hit!”, he added, in reference to California governor Gavin Newsom, who is a common foil of Trump’s.

It was unclear how these tariffs would operate, since movies and TV shows can be transmitted digitally without going through ports.

Nor was it clear what this would mean for US films that depend on foreign locations as part of the story, such as the James Bond franchise.

Analysts note that many films are international co-productions. They are also not goods that are imported in a conventional way, meaning the government would have to determine how to value them and when they even qualify as imports.

Trump made a similar threat in May, directing the Department of Commerce to immediately begin imposing a 100 percent tariff on films “produced in Foreign Lands”.

At the time, he complained the US film industry was “DYING a very fast death” due to other countries luring filmmakers and studios away with generous incentives, describing it as a national security threat.

The White House did not immediately respond to a request for comment from the Reuters news agency on how the tariffs would be implemented.

“There is too much uncertainty, and this latest move raises more questions than answers,” said PP Foresight analyst Paolo Pescatore.

“For now, as things stand, costs are likely to increase, and this will inevitably be passed on to consumers,” he said.

The president on Monday, on his same social media platform, also promised “substantial” tariffs on any country that makes its furniture outside the US.

He said he was doing so to make the state of North Carolina “GREAT again”, saying it had “completely lost its furniture business to China, and other Countries”.

New Delhi, India — Meghna Gupta* had planned it all – a master’s degree by 23, a few years of working in India, and then a move to the United States before she turned 30 to eventually settle there.

So, she clocked countless hours at the Hyderabad office of Tata Consultancy Services (TCS), India’s largest IT firm and a driver of the country’s emergence as the global outsourcing powerhouse in the sector. She waited to get to the promotion that would mean a stint on California’s West Coast.

Now, Gupta is 29, and her dreams lie in tatters after US President Donald Trump’s administration upended the H-1B visa programme that tech firms have used for more than three decades to bring skilled workers to the US.

Trump’s decision to increase the fee for the visas from about $2,000, in many cases, to $100,000 has imposed dramatic new costs on companies that sponsor these applications. The base salary an H-1B visa employee is supposed to be paid is $60,000. But the employer’s cost now rises to $160,000 at the minimum, and in many cases, companies will likely find American workers with similar skills for lower pay.

This is the Trump administration’s rationale as it presses US companies to hire local talent amid its larger anti-immigration policies. But for thousands of young people around the world still captivated by the American dream, this is a blow. And nowhere is that more so than in India, the world’s most populous nation, that, despite an economy that is growing faster than most other major nations, has still been bleeding skilled young people to developed nations.

For years, Indian IT companies themselves sponsored the most H-1B visas of all firms, using them to bring Indian employees to the US and then contractually outsourcing their expertise to other businesses, too. This changed: In 2014, seven out of the 10 companies that received the most H-1B visas were Indian or started in India; In 2024, that number dropped to four.

And in the first six months of 2025, Gupta’s TCS was the only Indian company in the top-10 H-1B visa recipients, in a list otherwise dominated by Amazon, Microsoft, Meta and Apple.

But what had not changed until now was the demographic of the workers that even the above US companies hired on H-1B visas. More than 70 percent of all H-1B visas were granted to Indian nationals in 2024, ranging from the tech sector to medicine. Chinese nationals were a distant second, with less than 12 percent.

Now, thousands across India fear that this pathway to the US is being slammed shut.

“It has left me heartbroken,” Gupta told Al Jazeera of Trump’s fee hike.

“All my life, I planned for this; everything circled around this goal for me to move to the US,” said Gupta, who was born and raised in Bageshwar, a town of 10,000 people in the northern Indian state of Uttarakhand.

“The so-called ‘American Dream’ looks like a cruel joke now.”

‘In the hole’

Gupta’s crisis reflects a broader contradiction that defines India today. On the one hand, the country — as Prime Minister Narendra Modi and his government frequently mention — is the world’s fastest-growing major economy.

India today boasts the world’s fourth-largest gross domestic product (GDP), behind just the US, China and Germany, after it passed Japan earlier this year. But the country’s creation of new jobs lags far behind the number of young people who enter its workforce every year, widening its employment gap. India’s biggest cities are creaking under inadequate public infrastructure, potholed roads, traffic snarls and growing income inequality.

The result: Millions like Gupta aspire to a life in the West, picking their career choices, usually in sectors like engineering or medicine, and working to get into hard-fought seats in top colleges – and then migrating. In the last five years, India has witnessed a drastic rise in the outflow of skilled professionals, particularly in STEM fields, who migrate to countries like Australia, Canada, New Zealand, the United Kingdom and the US.

As per the Indian government’s data, those numbers rose from 94,145 Indians in 2020 to 348,629 by 2024 — a 270 percent rise.

Trump’s new visa regime could now effectively close the pipeline of those skilled workers into the US. The fee hike comes on the back of a series of tension points in a souring US-India relationship in recent months. New Delhi is also currently facing a steep 50 percent tariff on its exports to the US — half of that for buying Russian crude, which the US says is funding the Kremlin’s war on Ukraine.

Ajay Srivastava, a former Indian trade officer and founder of the Global Trade Research Initiative (GTRI), a Delhi-based think tank, told Al Jazeera that the hardest-hit sectors after the new visa policy will be “the ones that Indian professionals dominate: mid-level IT services jobs, software developers, project managers, and back-end support in finance and healthcare”.

For many of these positions, the new $100,000 fee exceeds an entry-level employee’s annual salary, making sponsorship uneconomical, especially for smaller firms and startups, said Srivastava. “The cost of hiring a foreign worker now exceeds local hiring by a wide margin,” he said, adding that this would shift the hiring calculus of US firms.

“American firms will scout more domestic talent, reserve H-1Bs for only the hardest-to-fill specialist roles, and push routine work offshore to India or other hubs,” said Srivastava.

“The market has already priced in this pivot,” he said, citing the fall of Indian stock markets since Trump’s announcement, “as investors brace for shrinking US hiring”.

Indian STEM graduates and students, he said, “have to rethink US career plans altogether”.

To Sudhanshu Kaushik, founder of the North American Association of Indian Students, a body with members across 120 universities, the Trump administration’s “motive is to create panic and distress among H-1B visa holders and other immigrant visa holders”.

“To remind them that they don’t belong,” Kaushik told Al Jazeera. “And at any time, at any whim, the possibility of remaining in the United States can become incredibly difficult and excruciatingly impossible.”

The announcement came soon after the start of the new academic session, when many international students – including from India, which sends the largest cohort of foreign students to the US – have begun classes.

Typically, a large chunk of such students stay back in the US for work after graduating. An analysis of the National Survey of College Graduates suggests that 41 percent of international students who graduated between 2012 and 2020 were still in the US in 2021. For PhD holders, that figure jumps to 75 percent.

But Kaushik said he has received more than 80 queries on their hotline for students now worried about what the future holds.

“They know that they’re already in the hole,” he said, referring to the tuition and other fees running into tens of thousands of dollars that they have invested in a US education, with increasingly unclear job prospects.

The landscape in the US today, Srivastava of GTRI said, represents “fewer opportunities, tougher competition, and shrinking returns on US education”.

Nasscom, India’s apex IT trade body, has said the policy’s abrupt rollout could “potentially disrupt families” and the continuity of ongoing onshore projects for the country’s technology services firms.

The new policy, it added, could have “ripple effects” on the US innovation ecosystem and global job markets, pointing out that for companies, “additional cost will require adjustments”.

‘They do not care for people at all’

Ansh*, a senior software engineer at Meta, graduated from an Indian Institute of Technology (IIT), one in a chain of India’s most prestigious engineering school, and landed a job with Facebook soon after that.

He now lives with his wife in Menlo Park, in the heart of the US’s Silicon Valley, and drives a BMW sedan to work. Both Ansh and his wife are in the US on H-1B visas.

Last Saturday’s news from the White House left him rattled.

He spent that evening figuring out flights for his friends — Indians on H-1B visas who were out of the country, one in London, another in Bengaluru, India — to see if they could rush back to the US before the new rules kicked in on Sunday, as major US tech firms had recommended to their employees.

Since then, the Trump administration has clarified that the new fees will not apply to existing H-1B visas or renewals. For now, Ansh’s job and status in the US are secure.

But this is little reassurance, he said.

“In the last 11 years, I have never felt like going back to India,” Ansh told Al Jazeera. “But this sort of instability triggers people to make those life changes. And now we are here, wondering if one should return to India?”

Because he and his wife do not have children, Ansh said that a move back to India — while a dramatic rupture in their lives and plans — was at least something they could consider. But what of his colleagues and friends on H-1B visas, who have children, he asked?

“The way this has been done by the US government shows that they do not care for people at all,” he said. “These types of decisions are like … brain wave strikes, and then it is just executed.”

Ansh believes that the US also stands to lose from the new visa policy. “The immigrant contribution is deeply sprinkled into the DNA of the US’s success,” he said.

“Once talent goes away, innovation won’t happen,” he said. “It is going to have long-term consequences for visa holders and their families. Its impact would reach everyone, one way or the other.”

India’s struggle

After the announcement from the White House on Saturday, Prime Minister Modi’s principal secretary, PK Mishra, said that the government was encouraging Indians working abroad to return to the country.

Mishra’s comments were in tune with some experts who have suggested that the disruption in the H-1B visa policy could serve as an opportunity for India — as it could, in theory, stanch the brain drain that the country has long suffered from.

GTRI’s Srivastava said that US companies that have until now relied on immigrant visas like the H-1B might now explore more local hiring or offshore some jobs. “The $100,000 H-1B fee makes onsite deployment prohibitively expensive, so Indian IT firms will double down on offshore and remote delivery,” he said.

“US postings will be reserved only for mission-critical roles, while the bulk of hiring and project execution shifts to India and other offshore hubs,” he told Al Jazeera. “For US clients, this means higher dependence on offshore teams — raising familiar concerns about data security, compliance, and time-zone coordination — even as costs climb.”

Srivastava noted that India’s tech sector can absorb some returning H-1B workers, if they choose to return.

But that won’t be easy. He said that even though hiring in India’s IT and services sector has been growing year-on-year, the gaps are real, ranging from dipping job postings to new openings clustered in AI, cloud, and data science. And US-trained returnees would expect salaries well above Indian benchmarks.

And in reality, Kaushik said, many H-1B aspirants are looking at different countries as alternatives to the US — not India.

Ansh, the senior engineer at Meta, agreed. “In the US, we operate at the cutting edge of technology,” whereas the Indian tech ecosystem was still geared towards delivering immediate services.

“The Indian ecosystem is not at the pace where you innovate the next big thing in the world,” he said. “It is, in fact, far from there.”

To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.