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Yahoo
6 days ago
- Business
- Yahoo
Trump's proposed ‘immigrant worker tax' will drive money transfers underground, experts warn
Donald Trump's proposed tax on immigrant workers sending money home from America will take billions out of poor economies and drive the transfers underground, aid and industry experts have warned. The US president wants to impose a 3.5 per cent tax on remittance transfers sent by anyone who is not an American citizen, as part of his 'big beautiful' tax bill currently passing through Congress. The new tax would apply to an estimated 40m people in the US, including those with green cards or on working visas, and would include Britons working in America. The tax comes as part of broader legislation to cut down on illegal migration, and will make America the most expensive G7 country for workers to send money home from. The measure would effectively cut the amount of money being sent back home, experts say, hitting families that rely on remittances as an economic lifeline. Some countries in Latin America stand to lose as much as one per cent of their Gross National Income from the measure, research has estimated, with more money sent home from the United States than any other country in their world. The proposed tax also comes on top of sweeping cuts to US foreign aid which has already left large holes in the government budgets of many poor countries. Mexico stands to lose the most money in absolute terms, or around $2.6bn (£1.9bn) annually, according to modelling from the Centre for Global Development, a Washington-based global development think tank. But in terms of the proportion of their income, the worst hit will be El Salvador at just over 1 per cent, Honduras at 0.9 per cent and Jamaica at 0.7 per cent. Several African countries will also be badly hit, including the Gambia and Liberia. The centre said: 'For many countries, the remittance tax would be a further crushing blow after the recent cuts to US aid. 'For example, Liberia is a country heavily reliant on both foreign aid and remittances: a quarter of the country's foreign assistance came from the US, and remittances totalled more than three times Liberia's bilateral foreign aid in 2023. 'The US aid cuts were already projected to remove the equivalent of 2 per cent of GNI; even though it is small, the remittance tax will remove another 0.2 per cent.' Remittances sent back to Mexico have already fallen sharply, as Mr Trump has vowed to toughen up immigration enforcement and enact mass deportations. Mexico earlier this week said it had received 12 per cent less in April from a year earlier. Economists said the fall was due to a slowing US labour market and fear of deportation among immigrant workers. Gabriela Siller, director of economic analysis at Grupo Financiero Base, told Bloomberg: 'This was due to the fact that migrants in the United States are afraid to go out to work and send remittances because they could be deported.' Remittances are a huge part of the global economy, with the World Bank estimating that some $656bn (£484bn), equivalent to the GDP of Belgium, was sent home by workers abroad in 2023. The flow of money is deemed so important for development, that the United Nations has targets to bring the cost of remittances down by 2030. World Bank figures show that in the third quarter of 2024, the global average cost of sending a remittance of $200 (£148) was 6.62 per cent. The majority of that cost was taken up by fees to the provider, such as a bank, mobile phone app, or transfer firm like Western Union. The rest of the cost was due to foreign exchange margin. Looking at the G7 richest countries alone, the average cost to send money home was an average of 6.14 per cent, including 6.03 per cent in the US and 5.75 per cent in Britain. Mr Trump's new tax would put the US cost close to 10 per cent. Under the legislation, the tax would start in 2026 and hit anyone who is not a US citizen or US national, including green card holders and those visiting for work. Banks and money transfer services would collect the tax for every transaction and hand it on to the US Treasury, according to FXC Intelligence. Yet experts said the measure risked instead forcing large sums out of heavily regulated financial channels and into more informal underground routes which have no safeguards against money laundering, or criminal financing. The Atlantic Council this week said: 'Countries that have enacted punitive measures on cross-border payments and currency exchange have often undermined their own ability to combat financial crime, thereby weakening their economies and diminishing their foreign influence.' An original version of the bill wanted the tax to be set at five per cent, but it was cut back at the last minute. The current version is heading to the Senate and is expected to still face stiff opposition from transfer companies. Payments-industry trade groups representing companies like Western Union and Visa have written to Congress members saying the measure would hit migrants sending money back to relatives, on top of posing a greater money-laundering risk. The letter said: 'This provision would create a dangerous new precedent with respect to government overreach by invading the privacy of Americans, harming American businesses, and - for the first time - intruding on payment transactions between private individuals.' 'Everyday Americans would be asked to turn over sensitive identification information in order to use a regulated and licenced financial services provider to conduct ordinary, everyday financial transactions.' Protect yourself and your family by learning more about Global Health Security Broaden your horizons with award-winning British journalism. 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The National
23-04-2025
- Business
- The National
Pakistan's economy on right track, says Finance Minister Muhammad Aurangzeb
The recent upgrade of Pakistan's credit rating by Fitch is 'good external validation' that the country is on the right track, Finance Minister Muhammad Aurangzeb said on Wednesday. Mr Aurangzeb made the comments during a discussion at the Centre for Global Development, a Washington-based think tank that seeks to reduce international poverty through economic and policy research. Debt burdens, inflation, rising energy costs, youth unemployment and climate vulnerability have taken a toll on Pakistan's economy over the past decade. Yet in the last year, there have been some indications of improvement: inflation fell to 1.5 per cent in March, to a level not reached since 2015. Mr Aurangzeb, who was chief executive of Pakistan's largest bank HBL before being appointed Finance Minister in 2024, said the country's policy changes related to taxation, energy and state-owned enterprises have started to show progress. 'We are where we are in terms of macroeconomic stability,' he said. 'Currency stability and inflation rates are very good stories to tell.' Late last year, the Finance Minister said during discussions at the International Monetary Fund that Pakistan's economy had 'stopped the bleeding' and that the country was clamping down on tax evasion, with penalties for non-compliance being taken to 'punitive levels'. Also at the time, he said privatisation efforts were long overdue. 'The government has no business being in business,' he said. 'The private sector has to lead the country and step up.' On Wednesday, however, he acknowledged that efforts on privatisation had fallen short. 'Privatisation is one thing where we didn't make progress,' he said, explaining that he remained optimistic about those efforts, especially with Prime Minister Shehbaz Sharif appointing new privatisation chiefs. 'Under the new chairman, we're hoping to relaunch Pakistan International Airlines,' Mr Aurangzeb said, referring to the country's debt-ridden carrier. Generating revenue through enforced taxation and privatisation is a major component of Pakistan's $7 billion bailout programme approved by the IMF last year. Mr Aurangzeb was also asked about the increasingly uncertain economic outlook prompted by US President Donald Trump's tariff threats. 'If you look at the weighted average tariff on US imports into Pakistan, it's a little over 7 per cent,' he said. 'If you look at it for Pakistan's exports to the US, it's about 10 per cent. We import cotton and it's already zeroed out, so the tariffs aren't the main issue.' He said he was more concerned at the imbalance of trade. 'We export a little over $5 billion and we import a little more than $2 billion,' he added. He also said Pakistan was closely examining the idea of producing and exporting more agricultural products such as soy beans to bolster the economy and nullify trade imbalance. 'We feel we can narrow it down by a considerable amount,' Mr Aurangzeb said. His appearance in Washington coincides with the IMF and World Bank's Spring Meetings, in which he will also participate throughout the week.
The National
09-04-2025
- Business
- The National
Trump tariffs and USAID cuts a double blow for world's poorest countries
As President Donald Trump's "reciprocal" tariffs took effect on Wednesday, some of the world's most underprivileged countries hit with the steepest charges now face the additional challenge of Washington cutting off foreign aid through its dismantling of USAID. The developments come as part of a radical change in international policy under Mr Trump, who, during his first months in office, has ruptured the norms of global trade and US soft power. "You're basically saying, we're taking away our money, we're taking away your ability to raise money," said Charles Kenny, a senior fellow at the Centre for Global Development think tank in Washington. "So it's a double hit, and it's a very unfair double hit. Mr Trump has framed the levies as a means to reduce the $1.2 trillion US trade deficit. The least developed and small island countries affected by the economic measures represent 1.6 per cent and 0.4 per cent of the deficit, respectively, according to UN Trade and Development. Low-income countries typically have higher tariffs to generate government revenue and protect their domestic industries. But the President has argued these countries have ripped off the US. He alleges that Cambodia "made a fortune with the United States of America" by charging a 97 per cent tariff – which Phnom Penh disputes – and has issued a 40 per cent levy on the country. The average monthly salary in Cambodia will be $905.38 this year, according to Independent Property Services, a real estate company in the South-east Asian nation, and the new US tariffs could push many Cambodians deeper into poverty. Dozens of the world's poorest countries have been hit with some of the steepest penalties: a 46 per cent duty has been placed on goods from Vietnam, 50 per cent on Lesotho in Africa, 41 per cent on Syria and 37 per cent on Bangladesh. At the same time, a shift in US foreign policy is stripping away foreign aid to the same countries. Among them is Myanmar, which is recovering from a devastating earthquake that resulted in more than 3,500 deaths and razed critical infrastructure. As Myanmar began the early stages of its recovery efforts, Mr Trump hit Naypyidaw with a 44 per cent tariff. "Myanmar is in sort of no state to be responding to that kind of thing right now," Mr Kenny told The National. Washington has been criticised for its response to the earthquake, sending a team of three to help, as opposed to the more robust US reactions to previous global emergencies. The State Department said it had made $9 million in assistance available to Myanmar. Secretary of State Marco Rubio, who has presided over the dismantling of USAID, has defended Washington's response to the earthquake, citing Myanmar's unfriendly junta as a partial reason for the approach. But Jeremy Konyndyk, president of Refugees International and a former political appointee to USAID under presidents Barack Obama and Joe Biden, said Washington's response sends a "terrible message". "That's a terrible reason to say, we're just going to let people in Myanmar die – the fact that we have a political dispute with their government means that their people should be consigned to die crushed under buildings," he told The National. Mr Konyndyk, who led USAID's office of Foreign Disaster Assistance from 2013 to 2017, said the agency's dismantling has dramatically reduced Washington's ability to respond to disasters. "They have fired all the people," Mr Konyndyk said. "They have cancelled the contracts that would get a Dart [Disaster Assistance Response Team] off the ground." Mr Trump's tariffs also represent a change in US policy towards Africa, which used to benefit from congressional legislation enabling sub-Saharan countries to boost economic co-operation and trade with the US. Washington was a significant donor to Lesotho, where gross domestic product reached $2.1 billion in 2023 and which received $44 million from USAID last year. "The reason these countries need this aid so badly is that they're terribly poor," Mr Kenny told The National. "The way you make them richer is by them growing through manufacturing and seeing their economies undergo structural transformation. The tariffs are ruining the possibility." This comes as the wealth gap between rich and poor nations has widened since the Covid-19 pandemic. A report by the World Bank last year found one in three countries eligible for grants and loans under its International Development Association are now poorer than they were before the pandemic. "Having this global economic disruption coming right on the heels of the Covid economic disruptions is a really, really, historically damaging double whammy for some of the poorest economies in the world," said Mr Konyndyk. Now, the world's poorest countries are at risk of a potential global downturn because of the latest trade wars. Economists at Goldman Sachs this week raised the probability of a US recession from 35 per cent to 45 per cent, warning the economy could weaken further if the tariffs take effect. "That's going to further undermine the availability of aid because for a lot of countries, they tie their level of aid to share of their overall gross domestic product," Mr Konyndyk said. "So if their GDP goes down because it's a recession, their aid will also go down, and we're seeing that pressure emerging even before a potential recession hits."
The National
30-03-2025
- Health
- The National
Measles outbreak in US puts global vaccination campaigns at risk
A third US measles outbreak this year has put global health officials on alert and triggered a warning to those planning travel to affected states. The virus was officially eliminated from the US in 2000 but cases brought into the country from overseas have since has led to a rise in infections. Last year, 285 cases of measles were recorded but less than three months into this year, 378 infections had already been confirmed by March 20. In a nation of 347 million people, those numbers might appear insignificant but still represent a major increase in 12 months, from the 107 cases in the first three months of 2024. Eliminating measles from the US was marked as a historic public health achievement. That work is now under threat from rising vaccine hesitancy and social media misinformation. Vaccine coverage rates vary significantly between US states but a total of 18 jurisdictions nationwide reported incidents of measles by March this year. 'Since the start of the year, we've seen a rapid uptick in measles cases reported in the US, with two deaths so far – many of these cases are in Texas,' said Janeen Madan Keller, deputy director of Global Health Policy Program at the Centre for Global Development, told The National. 'Across the US, the coverage rate of the measles, mumps and rubella [MMR] vaccine among kindergarteners has been declining in recent years. It is now below the target coverage rate of 95 per cent, with significant variation across communities.' Falling US immunisation rates could have far-reaching effects on the rest of the world, Ms Madan Keller said. 'First, this could influence public perception on vaccines, extending far beyond the US,' she added. 'Second, as we've learnt, an infectious disease outbreak quickly travels across international borders. As measles vaccination rates decline in the US, there is a higher chance of outbreaks linked to travel.' The MMR vaccine, proven to be safe, has been circulated widely since the early 1970s, preventing millions of infections around the world. Symptoms of the virus include a cough, fever and blotchy skin rash. In severe cases, measles can lead to pneumonia and encephalitis, a brain infection. When more than 95 per cent of a population is vaccinated, most people are protected through herd immunity. But when those rates begin to decline, infections begin to creep up. In the US, vaccination among preschool-aged children slipped from 95.2 per cent in the 2019-20 school year to 92.7 per cent in 2023-24. Outbreaks are defined as three or more related cases. So far in 2025, there have been three outbreaks in the US, with younger people the most vulnerable. This year, 17 per cent of US cases have been resulted in hospital stays, with 42 per cent of those with measles aged five-19, and 33 per cent under five. A resurgence of measles after aggressive global anti-vaccine campaigns prompted the World Health Organisation (WHO) to name vaccine hesitancy as one of the greatest global health threats. Political persuasion can also affect effective immunisation campaigns. Since President Donald Trump took office for a second term, he has pulled the US out of the WHO and terminated funding for Gavi, the Vaccine Alliance – a global health partnership that aims to increase immunisation in developing nations. Previously, the US provided about 13 per cent of Gavi's funding. Natasha Crowcroft, a senior technical adviser on measles and rubella at the WHO, said funding cuts could affect global action to limit the spread of new infections. 'The US withdrawal [from the WHO] is having a major impact on the ability to support global measles and rubella elimination efforts,' she said. 'The US funds the entire measles prevention system at global and regional levels, and much of the support that can be provided to countries in need. 'This includes funding for leadership and expertise, vaccination programmes, tracking of measles cases, response to outbreaks and the entire global measles and rubella laboratory network of more than 760 labs around the world.' US funding has helped support measles elimination in 40 per cent of the world's countries, Ms Crowcroft said, which helped keep a lid on further infections. Measles anywhere in the world is a risk where immunisation coverage is below 95 per cent. Currently, the global coverage rate of the first dose of the measles vaccine is 83 per cent and the second dose is 74 per cent, contributing to outbreaks worldwide. In total, about one in four children are not fully vaccinated against measles. In 2025, a number of global campaigns are planned to reach unimmunised children with measles vaccines in Democratic Republic of the Congo, Nigeria, Ethiopia and Pakistan. 'The reduction of WHO support threatens the quality of those campaigns, increasing the risk they are delayed or don't reach all children at risk,' said Ms Crowcroft. 'We anticipate seeing increasing cases, outbreaks and deaths from measles as a result.' In the UAE, a campaign partnership between Emirates Health Services, Abu Dhabi Public Health Centre and Dubai Health Authority was launched in November to boost vaccination rates and support a global goal of eliminating the disease by 2030. Dr Mamata Bothra, specialist paediatrician and neonatologist at International Modern Hospital in Dubai, said anyone travelling to the US should plan accordingly. 'Measles is not a simple infection and can be fatal,' she said. 'After Covid, there was a break in vaccinations of some children. Since then, some parents no longer consider vaccination as that important. We are seeing many unvaccinated patients, not because the government facilities or health facilities are not giving them, but because parents are not taking them seriously. 'When we have large numbers of patients unvaccinated, the risk of measles rises. Anybody travelling to the US should check to see their child is fully vaccinated [against measles]. You should not go to crowded places when you hear there's an outbreak, and if your child is having fever and rash, immediately see a doctor.' Research by Columbia University's Mailman School of Public Health found social media has contributed to misinformation around vaccines and their effectiveness. Results published in the British Medical Journal found misinformation surrounding a number of vaccines, including childhood inoculations, HPV, Covid-19 and flu. Researchers at the university said simply banning misinformation on social media could backfire by driving people towards even less accurate sources of information. Efforts at debunking were also found to have had mixed results. While countering misinformation, they have the potential to deepen false beliefs. Effective messaging should include addressing reasons for hesitancy, while reinforcing cultural values, such as free choice and family protection, while building on trust, researchers say. 'Social media platforms are the epicentre of misinformation – they also need to be part of the solution,' said Kai Ruggeri, study author and professor of health policy and management at Columbia's Mailman School. 'Misinformation is not new and its noxious consequences are not insurmountable, but its effect on vaccine hesitancy through social media is an urgent global threat to public health.'
The Independent
19-03-2025
- Entertainment
- The Independent
JK Rowling ‘takes aim' at Harry Potter stars Daniel Radcliffe, Emma Watson and Rupert Grint in sarcastic post
JK Rowling has appeared to to take a swipe at Harry Potter leads Daniel Radcliffe, Emma Watson and Rupert Grint in her latest move on social media. The 59-year-old author is prolific for her X/Twitter spats, drawing backlash over the years for her political and personal views. Rowling's Harry Potter franchise has gone on to become a billion-dollar enterprise, complete with blockbuster movies, merchandise, a theme park and a forthcoming HBO series. But her relationship with the movies' lead actors Radcliffe (Potter), Watson (Hermione Granger) and Grint (Ron Weasley) has become increasingly fraught over the years as they have expressed their discomfort with her views. On Tuesday (18 March), Rowling X/Twitter account @tradingMaxiSL asked: 'What actor/actress instantly ruins a movie for you?' Rowling responded: 'Three guesses. Sorry, but that was irresistible.' She added laughing-face emojis to indicate she was being sarcastic. The comments have been widely interpreted as a dig at the film's three main actors. 'Three guesses? The same people who made millions off your work, then turned on you when it was 'cool',' one person hit out. Others defended the author, with one writing: 'The sad thing is at least two of the three would have never been more than character actors! You gave them the throne they use to look down on you! What will they do as the 'trans 15 minutes' winds down?' However, one person said: 'They ruined the movies for you, but you ruined everything else for everyone else, at least for those with beating hearts.' Rowling first made her stance on transgender women public in December 2019 when she tweeted in support of researcher Maya Forstater, whose job contract at think-tank Centre for Global Development was not renewed due to a series of tweets she had made questioning government plans to allow people to self-identify as another gender. These initial remarks prompted backlash from fans of the author, who labelled Rowling a 'terf' – an acronym that stands for trans-exclusionary radical feminist. The author, who has denied being transphobic, but previously stated she would rather go to jail than refer to a trans person by their preferred pronouns, went on to post a much-maligned essay about gender identity ideology on her website. Last year Radcliffe revealed he had not spoken to the author in years. 'It makes me really sad, ultimately,' he said, 'because I do look at the person that I met, the times that we met, and the books that she wrote, and the world that she created, and all of that is to me so deeply empathic.'
