Business
The US economy is a puzzle but the pieces aren’t fitting together
Bloomberg/GettyAsk almost any economist and they will tell you: US President Donald Trump has been running risks with the world’s largest economy.
They say his tariffs and crackdown on immigrants risk a return of 1970s-esque “stagflation”, when a sudden oil shock prompted stagnant growth and spiralling prices, except this time the crisis would be self-inflicted.
The White House has just as steadfastly dismissed those concerns, attacking the experts – and, in the case of the US Bureau of Labor Statistics commissioner, firing her.
Questions about how it will all play out have left the US central bank in a state of paralysis, as it waits for data to clarify what’s happening before making a move on interest rates.
But after a busy few weeks of company updates, data on jobs and inflation, we still don’t really know.
The labour market is sending clearly worrisome signals.
Job creation was almost non-existent in May and June, sluggish in July, and the ranks of discouraged workers are growing.
That 1 August jobs report sent the stock market sinking and Trump into a tailspin, prompting him to fire the BLS commissioner.
A few days later, Moody’s Analytics economist Mark Zandi declared on social media that the economy was “on the precipice of a recession”.
That’s not the consensus.
For sure, the economy has slowed, growing at an annual rate of 1.2% in the first half of the year, down one percentage point from 2024.
But consumer spending, despite weakening, has stayed more resilient than many had expected, despite downbeat assessments by some firms.
Shares, after the 1 August hit, quickly resumed their upward march.
“We continue to struggle to see signs of weakness,” the chief financial officer of JPMorgan Chase, America’s biggest bank, told investors last month. “The consumer basically seems to be fine.”
That has raised hopes that the economy might power through, as it did a few years ago, to widespread surprise, despite getting hit with the highest inflation since the 1980s and a sharp rise in interest rates.
On Friday, the US government reported that spending at retailers and restaurants rose 0.5% from June to July – and that spending in June had been stronger than previously estimated.
“Consumers are down but not out,” wrote Michael Pearce, deputy chief US economist at Oxford Economics, which is predicting a modest recovery in spending in the months ahead, as tax cuts and a stock market recovery boost confidence.
“With the sluggish yet resilient real economy, the labor market is unlikely to deteriorate sharply.”
Challenges remain in the months ahead.
For now, households haven’t seen a dramatic run-up in prices at the store that might force them to cut back.
Consumer prices rose 2.7% in July compared with a year ago, the same pace as in June.
But many forecasters had not expected higher prices to start appearing until later this year, especially after Trump delayed some of his most aggressive tariff plans until this month.
Prices for hard-to-substitute, imported staples, like coffee and bananas, have already jumped.
Forecasters expect price increases to widen in the months ahead, as firms sell down pre-tariff stock and raise prices, now that they have more confidence about what the tariff policies might be.
That’s why there was so much focus on the producer price index, which measures wholesale prices commanded by US producers before they hit consumers, offering a clue to what’s coming.
It accelerated at the fastest pace in more than three years in July.
And worryingly, both consumer and producer inflation show the uptick in prices is not limited to goods, suggesting stagflation might very well be staging a return.
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Billions to be paid! US starts refund process for Trump tariffs: Can Indian exporters claim? – The Times of India
The US government has rolled out a system to facilitate refunds of over $166 billion from tariffs introduced by Donald Trump and later invalidated by the US Supreme Court. In February, the court struck down a broad set of reciprocal tariffs, delivering a significant setback to a central pillar of Trump’s economic agenda and paving the way for repayments.On Monday, US Customs and Border Protection announced that the first phase of its refund-processing platform is now operational, allowing importers and customs brokers to begin filing claims to recover the duties they had paid.The agency had earlier estimated in March that more than 330,000 importers may qualify for reimbursements on duties or deposits linked to over 53 million shipments. In its initial rollout, the platform covers about $127 billion in duty payments eligible for electronic refunds.
Tariff refunds What US Customs and Border Protection has said
The process to return reciprocal tariff payments starts on April 20 through a newly launched online platform, CAPE (Consolidated Administration and Processing of Entries), operated by US Customs and Border Protection.This move follows a February 20, 2026 judgment by the US Supreme Court, which ruled that tariffs introduced by Donald Trump were unlawful. The court found that these duties had been imposed under the International Emergency Economic Powers Act without adequate legal backing.Also Read | Iran has closed Strait of Hormuz completely: What does this mean for India’s crude oil, LPG, LNG supplies?The tariffs impacted a wide range of exports from countries including India. To receive repayments, importers in the US are required to submit claims which include shipment details, applicable tariff classifications and proof of payment. Once approved, these refunds along with interest are expected to be processed within 60 to 90 days. Eligibility is limited to those who originally paid the tariffs, primarily US importers and businesses.The total amount to be refunded is estimated at around $166 billion, with nearly $12 billion tied to Indian goods.The tariff structure began at 10% on April 2, 2025, before escalating quickly. Duties on Indian goods increased to 25% by August 7, 2025, and further to 50% by August 28, remaining at that level until early February 2026. On February 6, 2026, rates were lowered to 18% following negotiations. However, the Supreme Court’s ruling later that month nullified the entire regime, effectively rendering the tariffs void and paving the way for refunds.
What it means for India
Exporters and end consumers are not permitted to file claims directly, although some companies, such as FedEx, may opt to pass on the refunded amounts at their discretion.According to Global Trade Research Initiative (GTRI), around 53% of India’s shipments to the US, which largely comprises textiles and apparel, were subject to higher tariffs. This makes them the largest contributors to the refund pool. Of the nearly $12 billion tied to Indian exports, textiles and apparel are estimated to account for around $4 billion, followed by engineering goods with a similar share and chemicals contributing about $2 billion, while other sectors make up the remainder.However, what is important to understand is that these refunds will not flow directly to Indian exporters. The payments are meant only for US importers who bore the tariff burden.Also Read | Explained: On way to 4th largest, how India slipped to 6th rank & what it means for 3rd largest economy dream“Payments go only to US importers, and exporters have no legal right to claim them. Indian exporters, therefore, have no direct legal route to claim refunds,” explains Ajay Srivastava, founder of GTRI.Hence, any potential recovery of these refunds will depend on commercial discussions. Exporters will need to actively engage with their US counterparts to negotiate a share of the refunded duties, particularly in cases where earlier pricing factored in tariff costs. GTRI explains that this can be done by reopening contracts, adding rebate-sharing clauses, asking for price revisions or credit notes, and using invoices and tariff data to show how costs were absorbed. “Exporters with stronger bargaining power, especially in textiles and engineering goods, may secure better terms in future orders,” the think tank says.Industry bodies such as the Apparel Export Promotion Council, Engineering Export Promotion Council of India and Chemexcil can also assist exporters with guidance on contract renegotiation and sector-specific approaches, it adds.
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The State Bank of Pakistan (SBP) has received $1 billion from the Ministry of Finance of the Kingdom of Saudi Arabia, marking the second tranche of a $3 billion deposit agreed recently, the central bank said on Tuesday.
According to the statement issued by the central bank, the second tranche was received with a value date of April 20, 2026.
The first tranche of $2 billion had already been received on April 15, 2026, bringing the total inflows under the arrangement to $3 billion.
The development comes days after Prime Minister Shehbaz Sharif’s visit to Saudi Arabia, where he engaged in diplomatic efforts aimed at promoting regional peace.
During his visit, the premier met Crown Prince Mohammed bin Salman in Jeddah and expressed appreciation for the Kingdom’s continued support for Pakistan’s economic stability. He also conveyed solidarity with Saudi Arabia in light of recent regional developments.
Earlier on April 16, Finance Minister Muhammad Aurangzeb had announced that Saudi Arabia would provide $3 billion in additional financial support, with disbursement expected shortly.
He also noted that Riyadh had extended the tenure of its existing $5 billion deposit, removing the earlier annual rollover requirement.
The Saudi funding has strengthened Pakistan’s external position as it repaid $2 billion in debt to the United Arab Emirates (UAE).
The amount was kept with the central banks as a safe deposit.
Saudi Arabia has been a key financial partner for Pakistan, having provided support packages during previous economic challenges, including a $6 billion assistance programme in 2018 comprising deposits and oil facility arrangements.
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Billions to be paid! US starts refund process for Trump tariffs: Can Indian exporters claim? – The Times of India
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