The U.S. government shutdown persists, yet its impact extends beyond the borders of the United States. It casts a heavy shadow over the global economy as a whole.
What Does a Government Shutdown Mean?
"A shutdown occurs when Congress fails to agree on the federal budget. Non-essential services come to a halt, and hundreds of thousands of government employees are sent home—costing about $400 million per day. Each day of the shutdown could cost the U.S. economy around 0.1% of its GDP, or roughly $2 billion daily. If it stretches to a month, losses begin to surface, starting with rising unemployment rates."
Ripple Effects
"More than 80% of global trade is conducted in U.S. dollars. So any disruption in Washington shakes global markets—from Asia to Europe. During the last extended shutdown in 2018, the S&P 500 index declined by about 2.5%, and confidence in U.S. bonds wavered. A weaker dollar means volatile oil prices, rising global inflation rates, and shaken investor confidence."
Economic Impacts
"Delays in U.S. spending and services negatively affect the global economy. International companies freeze deals. Disruptions occur in global supply chains. Travel and visa processing slow down by up to 20%. Even U.S.-funded international aid programs—worth around $50 billion annually—may come to a halt, simply because the world’s largest economy decided to hit the brakes."
Global Consequences
"A U.S. shutdown may seem like a domestic issue, but in an interconnected world… its effects cross borders. Stability in Washington means stability everywhere—because what happens in Washington doesn’t stay in Washington."