📉 America’s looming fiscal crisis

Good morning. President Trump's Liberation Day arrived yesterday during which the Trump administration kindly laid out new tariffs.

Meanwhile, US Senator Cory Booker made the longest Senate speech in 25-hour stand against Trump.

To this, ChatGPT (not us) says: In a country where reality often feels like a satire, it seems the only thing lasting longer than Senate speeches is the collective national exhaustion 🙃 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 📉 America’s looming fiscal crisis

• 🏗️ US tariffs and India's steel industry

• 🗞️ Bite-sized summaries

  • 🏫 Waqf Amendment bill sparks heated debate in Lok Sabha

  • 🚗 Tesla sales drop 13% in Q1 amid Musk controversy and aging models

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian markets partially rebounded after Tuesday's losses. Gains were led by FMCG, consumer durables, and realty sectors, supported by strong manufacturing PMI data and optimism about limited tariff impact.

🌍️ International

• US markets were volatile but ended higher after President Trump's tariff announcement was less severe than anticipated. Tech stocks rebounded despite Tesla dropping over 2% due to weak delivery numbers.

AMERICA

📉 America’s looming fiscal crisis

The United States is on a troubling fiscal path, with government spending far outpacing tax revenues, leading to an unsustainable rise in public debt.

According to the Congressional Budget Office (CBO), if no corrective actions are taken, the national debt could surpass 200% of GDP within the next 30 years.

Currently, the U.S. government spends approximately $7 trillion annually while collecting only $5 trillion in taxes, creating a deficit of over 6% of GDP. This level of borrowing, if left unchecked, could have dire consequences, including market instability, soaring interest rates, and even the risk of government default.

Despite these warnings, Congress remains divided on solutions. Republicans are pushing for further tax cuts, particularly by extending provisions from the 2017 Tax Cuts and Jobs Act, which could add another $40 trillion to the national debt over three decades. Meanwhile, cost-cutting measures like mass layoffs and service reductions are proving ineffective, harming public services without significantly lowering the deficit.

If the debt crisis spirals out of control, financial markets could react harshly, leading to bond collapses and surging inflation. The only viable solution is a balanced approach—moderate tax increases combined with strategic spending cuts. Some elements of past tax reforms, like higher standard deductions and investment incentives, could be retained, but they must be offset by measures that meaningfully reduce deficits.

The U.S. government has delayed action for too long. Without immediate fiscal responsibility, the consequences could be severe—not just for America but for the global economy. Congress must prioritize long-term stability before financial markets or voters force drastic corrections.

Read more: Economic Times

MARKETS

🏗️ US tariffs and India's steel industry

The recent decision by the US government to impose a 25% tariff on steel and aluminum imports is set to disrupt global trade flows, with potential repercussions for India. According to SAIL Chairman Amarendu Prakash, this move could redirect surplus steel from Asian countries like China, Japan, and South Korea to India, increasing competition for domestic producers.

Why this matters for India:

1. Surge in steel imports: With the US closing its doors to Asian steel, these exports may flood India, putting pressure on local steelmakers.

2. Threat to domestic industry: Cheap imports could undercut Indian steel manufacturers, affecting production, pricing, and employment in the sector.

3. Call for safeguard duties: To counteract this, the Directorate General of Trade Remedies (DGTR) has recommended a 12% provisional safeguard duty on specific steel products for 200 days. The final decision rests with the Finance Ministry.

While India's steel exports to the US are relatively small, high tariffs could still make it harder for Indian firms to compete in global markets. However, critical steel components that the US cannot produce will still see demand, albeit at higher prices.

Looking ahead: To safeguard domestic steelmakers, India may need to accelerate policy measures, including:

• Implementing safeguard duties to prevent market flooding.

• Encouraging domestic consumption and infrastructure development.

• Exploring new export markets to reduce reliance on the US.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🏫 Waqf Amendment bill sparks heated debate in Lok Sabha - The Waqf Amendment Bill, introduced by Union Minister Kiren Rijiju, sparked a heated debate in the Lok Sabha. The bill aims to improve Waqf property management with technology-driven solutions and has been renamed the Unified Waqf Management Empowerment, Efficiency, and Development (UMEED) Bill. The Opposition, led by Congress, accused the government of rushing the legislation without time for amendments. Amit Shah defended the bill, stressing thorough discussions. Speaker Om Birla assured balanced consideration of amendments. Congress called it an attempt to "dilute, defame, divide & disenfranchise" minorities, while Akhilesh Yadav claimed it was a BJP smokescreen for failures.

🚗 Tesla sales drop 13% in Q1 amid Musk controversy and aging models - Tesla's first-quarter sales fell 13%, with deliveries dropping to 336,681 vehicles, missing analyst expectations of 408,000. The decline is attributed to an aging lineup, increasing competition, and backlash against Elon Musk’s political stance. Despite offering discounts and incentives, Tesla struggled as buyers delayed purchases, awaiting a Model Y update. Chinese EV giant BYD’s rapid-charging technology also pressured Tesla’s market share. The company’s stock has fallen nearly 50% since December, raising concerns about its upcoming earnings report. Analysts remain uncertain about the exact impact of political boycotts versus broader EV market trends.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• UPI faces second outage in a week, disrupting transactions.

• A supply chain quirk helped Air India get 50 Boeing jets made for Chinese peers.

• Federal prosecutors to seek death penalty for Luigi Mangione in UnitedHealthcare CEO’s killing.

• Tinder’s new AI-powered game assesses your flirting skills.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Fab four stars revealed for major Beatles films.

• India's star striker Vandana Katariya retires from international hockey

• IPL 2025: GT beat RCB by 8 wickets. Leaderboard here.