Top White House economic advisers have raised alarms over the prolonged U.S. federal government shutdown, warning it could slash economic growth by half and trigger a contraction in the fourth quarter. With the shutdown entering its 40th day, disruptions to air travel, federal services, and consumer spending threaten to ripple across global markets—including Asia’s export-driven economies.
White House economic adviser Kevin Hassett highlighted the risk of a "negative quarter" for U.S. GDP if Thanksgiving travel chaos persists, citing air traffic controller shortages. Treasury Secretary Scott Bessent echoed concerns, stating the shutdown’s economic toll is escalating daily. Over 800,000 federal workers remain furloughed, delaying paychecks and straining consumer confidence ahead of the critical holiday season.
For Asia, the implications are twofold: weakened U.S. demand could dent exports, while market volatility may unsettle investors eyeing emerging economies. Analysts note that prolonged uncertainty could pressure manufacturing hubs in China, Japan, and Southeast Asia, where trade ties with the U.S. remain pivotal. Meanwhile, travel disruptions ahead of Thanksgiving—a peak period for trans-Pacific flights—could temporarily impact Asia’s aviation and tourism sectors.
As global markets monitor the stalemate, Asian policymakers are assessing contingency plans to mitigate spillover risks. The shutdown underscores the interconnectedness of modern economies, where political gridlock in Washington reverberates far beyond U.S. borders.
