America's credit rating slip: How serious?
As political rhetoric gives way to reality, what is emerging isn't looking too great for America. On Friday, it was stripped of the last of its top-notch sovereign ratings by big global credit-risk tracking agencies, with Moody's downgrading its debt to Aa1 from Aaa. Standard & Poor's had notched it down in 2011 and Fitch Ratings in 2023.
Also Read: Kaushik Basu: America's capacity for self-harm is breathtaking
In effect, US debt is no longer the gold standard, though America's unique position as the world's reserve-currency issuer still affords it the exorbitant privilege of borrowing cheaply.
Also Read: Barry Eichengreen: The end of American exceptionalism?
This ability, however, may weaken if the US doesn't find fiscal solutions to curtail its public debt. Global confidence in US economic policies has been rattled on many fronts lately.
Also Read: Barry Eichengreen: The sterling's past may offer clues to the dollar's future
Over the weekend, supermarket chain Walmart was asked by US President Donald Trump to 'eat the tariffs" imposed by his administration, instead of hiking prices. This attempt at interfering with the decisions of a private profit-oriented company suggests a preference for micro-management that's unlikely to work in the interests of America Inc.
As seen in the past, rating agencies might be behind the curve—this time on assessing risks borne by US capitalism if Trump's new policy paradigm takes effect.
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Time of India
22 minutes ago
- Time of India
Supreme Court Ruling On Gun Companies: Supreme Court Blocks Mexico's Gun Lawsuit Against US Companies, ET LegalWorld
The U.S. Supreme Court on Thursday spared two American gun companies from a lawsuit by Mexico's government accusing them of aiding illegal firearms trafficking to drug cartels and fueling gun violence in the southern neighbor of the United States. The justices in a 9-0 ruling authored by liberal Justice Elena Kagan overturned a lower court's ruling that had allowed the lawsuit to proceed against firearms maker Smith & Wesson and distributor Interstate Arms. The lower court had found that Mexico plausibly alleged that the companies aided and abetted unlawful sales routing guns to Mexican drug cartels, harming its government. Advt Advt Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETLegalWorld App Get Realtime updates Save your favourite articles Scan to download App The justices embraced the argument made by the companies for dismissal of Mexico's suit under a 2005 U.S. law called the Protection of Lawful Commerce in Arms Act that broadly shields gun companies from liability for crimes committed with their products. The Boston-based 1st U.S. Circuit Court of Appeals had decided in 2024 that the alleged conduct by the companies fell outside these Supreme Court decided that while it has little doubt that U.S. companies are aware of some unlawful sales to Mexican gun traffickers, Mexico's lawsuit failed to allege that the companies had aided and abetted such illegal firearms sales by deliberately helping to bring about the transactions."Mexico's plausible allegations are of 'indifference' rather than assistance," Kagan wrote. "They are of the manufacturers merely allowing some unidentified 'bad actors' to make illegal use of their wares." The case came to the Supreme Court at a complicated time for U.S.-Mexican relations as President Donald Trump pursues on-again, off-again tariffs on Mexican goods. Trump has also accused Mexico of doing too little to stop the flow of synthetic drugs such as fentanyl and migrant arrivals at the lawsuit, filed in Boston in 2021, accused the two companies of violating various U.S. and Mexican laws. Mexico claims that the companies have deliberately maintained a distribution system that included firearms dealers who knowingly sell weapons to third-party, or "straw," purchasers who then traffic guns to cartels in suit also accused the companies of unlawfully designing and marketing their guns as military-grade weapons to drive up demand among the cartels, including by associating their products with the American military and law enforcement. The gun companies said they make and sell lawful avoid its lawsuit being dismissed under the 2005 law, Mexico was required to plausibly allege that the companies aided and abetted illegal gun sales and that such conduct was the "proximate cause" - a legal principle involving who is responsible for causing an injury - of the harms claimed by Mexico. The Supreme Court, which heard arguments in the case on March 4, declined to resolve the proximate cause question after finding that Mexico's suit failed to adequately allege aiding and Arrocha Olabuenaga, the legal adviser for Mexico's Foreign Ministry, vowed that Mexico will continue pursuing its legal fight."While we are disappointed with the decision from this Supreme Court, we are convinced of the strength of our arguments and the evidence that upholds them, and we are encouraged by the support at home and abroad for Mexico's actions," he in the lawsuit had sought monetary damages of an unspecified amount and a court order requiring Smith & Wesson and Interstate Arms to take steps to "abate and remedy the public nuisance they have created in Mexico."The Second Amendment Foundation, a gun rights group that backed the U.S. gun companies in the case, welcomed Thursday's ruling."The lawsuit, dreamt up by multiple gun control groups, had one goal - bankrupt the American firearms market by allowing civil liability to apply for the criminal misuse of its products," the group said in a social media post. "Thankfully the Supreme Court stepped in and squashed it."Gun violence fueled by trafficked U.S.-made firearms has contributed to a decline in business investment and economic activity in Mexico and forced its government to incur unusually high costs on services including healthcare, law enforcement and the military, according to the a country with strict firearms laws, has said most of its gun homicides are committed with weapons trafficked from the United States and valued at more than $250 million Perez Ricart, an international affairs researcher at Mexico's Center for Economic Research and Teaching (CIDE), criticized the ruling."Once again, the industry is shielded. It doesn't matter how many bullets cross the border or how many people are killed on the Mexican side. Bullets are not the only things that kill; so does the legal impunity guaranteed by Washington," Ricart said in a social media post.
Time of India
35 minutes ago
- Time of India
'From $100k to 10LPA salary': Redditor asks for suggestion on return to India upon H1-B expiry
H-1B visa expires after six years and has to be renewed after that. A Reddit user asked for tips on how to mentally prepare for a huge salary cut while coming back to India from US for any personal reason or the expiry of the H-1B visa. "Those who plan to return to India from the US either due to expiring H1B or personal reasons, how are you mentally preparing for this reality check? These kinds of salaries are normal in entry- mid level tech roles in US but this is equivalent to what a CEO or director earns in India. ..." the post read. The crackdown on foreign nationals by the Donald Trump administration has proved to be a challenge for Indians as well who are accused of taking up American jobs at a cheaper rate. Other Redditors opined that both $100K in the US and Rs 10LPA in India are equally depressing. "A salary of 10 LPA is quite low. I used to earn more than that 10 years ago. In today's world, you need a salary of 40-50 LPA to live a decent life in Indian metro cities," one wrote. Redditor asks how to prepare for a low salary if one relocates to India from US. One pointed out that there are some perks in coming back to the home country minus the stress of getting sacked anytime in the US because of the geopolitics that impact H-1B and F-1B visas. "I'm at 500k in the US on H1b. It is going to be a big adjustment in India if H1b goes away," one wrote. "You're seem to be naive. You can't make apples to apples comparison. Also, once you graduate with a Master degree you make more than 10LPA in India. That's like less than a fresher's salary," one wrote. "You can assume that an annual $100k lifestyle in New York is equivalent to around an annual $40K lifestyle in. Delhi or in another way. And this is a very conservative estimation," one gave a breakdown of the cost in both countries though it would vary a lot from city to city.
Time of India
an hour ago
- Time of India
'Ukraine, Russia should fight for a while': US President Trump compares war to kids fighting, says sanctions still on table
Donald Trump President Donald Trump on Thursday said it might be better to 'let them fight for a while' when asked about Russia's invasion of Ukraine, drawing a striking analogy between the war and a playground brawl as he hosted newly elected German Chancellor Friedrich Merz at the White House. 'Sometimes you're better off letting them fight for a while and then pulling them apart,' Trump said during an Oval Office meeting, adding that he had relayed the same sentiment to Russian President Vladimir Putin in a call the day before. Merz, sitting beside him, said he agreed with Trump that the war was 'terrible,' but emphasized Germany's full support for Ukraine and its efforts to avoid civilian harm. 'We are on Ukraine's side,' Merz said. 'We are trying to get them stronger.' The visit marked the first in-person meeting between the two leaders, though they've spoken multiple times since Merz took office on May 6. Merz, a business-friendly conservative and longtime critic of Trump's predecessor Angela Merkel, presented Trump with a gold-framed birth certificate of his grandfather Friedrich Trump, who emigrated from Germany. Behind the symbolism lay major policy disagreements. Trump is pressing NATO allies to boost defense spending to 5% of GDP, a leap from the 2% minimum previously agreed. Merz, for his part, has endorsed 3.5% by 2032, plus additional spending on infrastructure. A White House official said trade, defense, and what the administration calls 'democratic backsliding' in Germany were also on the agenda. Trump's administration has criticized Berlin for perceived erosion of free speech protections and its reluctance to engage with the far-right Alternative for Germany (AfD), now the country's main opposition party. Merz defended Germany's internal politics, saying he was open to discussing domestic matters with Trump, but noted, 'We hold back when it comes to American domestic politics.' On Ukraine, Merz rejected the idea of a 'dictated peace,' called for more sanctions against Russia, and vowed to keep supporting Kyiv militarily — including helping it develop long-range missiles. Under his predecessor, Olaf Scholz, Germany became the second-largest supplier of weapons to Ukraine after the US. Trump left open the possibility of sanctions on both Russia and Ukraine. 'When I see the moment where it's not going to stop … we'll be very, very tough,' he said. Trade tensions also loomed large. Germany exported $160 billion in goods to the US last year, versus $75 billion in U.S. exports to Germany, a deficit Trump wants to erase. The president's 25% tariff on autos is aimed at pressuring German automakers like BMW and Mercedes-Benz, though many already have US plants. Merz warned that tariffs 'benefit no one,' but trade decisions will ultimately rest with the EU. Trump recently paused a 50% tariff hike on EU goods set to take effect this month. Despite the friction, both leaders projected cautious optimism about cooperation. As Trump put it: 'We'll see.'
