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Can Joe Biden bring order to the southern border without Congress?

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EVEN BACK when it looked as if the bipartisan border-security bill would get a fair hearing in the Senate, the Biden administration insisted that it was working on a Plan B. Then the bill fell apart, owing to Donald Trump’s desire to deprive Joe Biden of any accomplishments to campaign on, and Plan B became Plan A.

A month on Mr Biden has yet to roll out an executive order for the border—for two reasons. Politically, the border bill’s death revealed just how little congressional Republicans care about governing these days. Their intransigence gives Mr Biden an opening to try to convince voters that the Republican Party are the agents of border chaos. Practically, there is very little the administration can do to restore order at the southern border without money from Congress. Presidents are not powerless when it comes to immigration: Mr Biden’s liberal use of parole proves that. But in reforming the asylum system, the president is constrained by four things: the courts, a lack of cash, international law and Mexico.

Congress has not passed substantive immigration reform since 1990, leaving presidential administrations to govern by executive fiat. The legality of these orders is increasingly challenged in the court system. The Biden administration has reportedly floated two ideas. One is an executive order that would further restrict the ability of migrants to seek asylum if they crossed the border between ports of entry. Yet Mr Biden implemented a version of that last year, and its effectiveness has been limited because of litigation and a gummed-up immigration-court system. The snag is not that crossing between ports is legal (it isn’t), argues Aaron Reichlin-Melnick of the American Immigration Council, an advocacy group. The problem is the inability of immigration courts to process people quickly. It takes more than four years on average just to get an asylum hearing. Staffing shortages—from Border Patrol agents to asylum officers and immigration-court judges—are why Mr Biden insists that congressional action, and the money that comes with it, is the only answer.

The second idea would take a page out of Mr Trump’s immigration playbook. In 2017 Mr Trump restricted travel to America from several Muslim-majority countries under an obscure statute that grants presidents broad authority to suspend the entry of people who “would be detrimental to the interests of the United States”. The Supreme Court upheld Mr Trump’s order in Trump v Hawaii, a case Mike Johnson, the speaker of the House, cites as proof that Mr Biden does not need Congress to act. But that law and that case are less relevant when the people being banned are already in the country, not waiting to fly over.

This is where international law comes in. America signed the 1967 Protocol which expanded the United Nations’ 1951 Refugee Convention. The treaty stipulates that asylum-seekers, no matter how they entered a country, may lodge an asylum claim. That provision is also enshrined in American law, and is the basis for the legal challenge to Mr Biden’s rule limiting asylum for those who cross the border between ports. America must also abide by the principle of non-refoulement, which bars countries from returning asylum-seekers to places where their life or liberty would be at risk.

Mr Johnson’s other favourite suggestion—in lieu of his caucus doing anything—is that Mr Biden should reinstate Mr Trump’s “Remain in Mexico” policy, under which some migrants were returned to the southern side of the border to await a hearing. Mr Johnson waves off Mexico’s resistance to restarting the policy. “We’re the United States,” he told reporters. “Mexico will do what we say.”

Things are not that simple. Mr Trump bullied Andrés Manuel López Obrador, Mexico’s president, into cracking down on migration by threatening hefty tariffs on imports. Mr Biden may be loth to apply such leverage when Mexico is now America’s largest trading partner and is helping to curb fentanyl trafficking. What’s more, only about 80,000 migrants were enrolled in the Remain in Mexico programme between 2019 and 2022, a tiny fraction of those who crossed the border.

In small ways, the Biden administration is making progress. The number of monthly “credible fear” decisions—the standard some migrants must pass to apply for asylum—has more than quintupled since 2022, speeding the process for many. Mexico’s crackdown on migrant trains and the removal of migrants to southern Mexico has diminished flows to Texas (but pushed them towards Arizona).

Despite the obstacles, the president may issue some kind of executive order anyway. “They will be immediately sued and probably blocked by the courts,” argues Julia Gelatt of the Migration Policy Institute, a think-tank. “Maybe that is helpful politically to say, ‘Well, we tried. We really do need you, Congress’.”

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Economics

Russia cuts sky-high interest rates for the first time since 2022

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A Moscow shopping mall pictured earlier this year.

Anadolu | Anadolu | Getty Images

Russia’s central bank on Friday cut interest rates for the first time since September 2022, in a sign that inflation pressures — not long ago described by President Vladimir Putin as “alarming” — are beginning to ease.

The Bank of Russia took rates down by 100 basis points to 20%. They had been held at 21% since last October, the highest level since the new benchmark rate was introduced in 2013.

The inflation rate in April was 6.2%, it said, down from an average 8.2% across the first quarter of 2025.

Russia’s full-scale invasion of Ukraine in February 2022 has put immense strain on prices, with a weaker ruble pushing up import prices, and on an economy it has had to re-orient through subsequent years of war.

This is a breaking news story and will be updated shortly.

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World could be facing another ‘China shock,’ but there’s a silver-lining

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Singapore-based online grocery retailer Webuy staff is offloading containers filled with goods shipped from China.

SINGAPORE — Vincent Xue runs an online grocery retail business, offering fresh produce, canned food, packaged easy-to-cook ingredients to cost-conscious local consumers in Singapore.

Xue’s Nasdaq-listed Webuy Global sources primarily from suppliers in China. Since late last year, one third of his suppliers, saddled with excess inventory in China, have offered steep discounts of up to 70%.

“Chinese domestic markets are too competitive, some larger F&B manufacturers were struggling to destock their inventories as weak consumer demand drags,” he said in Mandarin, translated by CNBC.

Xue has also gotten busier this year after sealing a partnership with Chinese e-commerce platform Pinduoduo that has been making inroads into the Southeast Asian country.

“There will be about 5-6 containers loaded with Pinduoduo’s orders coming in every week,” Xue said, and Webuy Global will support the last-mile delivery to customers.

At a time when steep tariffs are deterring Chinese exports to the U.S., while domestic consumption remains a worry, overcapacity has led Chinese producer prices to stay in deflationary territory for more than two years. Consumer inflation has remained near zero.

Still, the country is doubling down on manufacturing, and this production overdrive is rippling through global markets, stirring anxiety in Asia that a flood of cheap imports could squeeze local industries, experts said.

“Every economy around the world is concerned about being swamped by Chinese exports … many of them [have] started to put up barriers to importing from China,” said Eswar Prasad, senior professor of trade policy and economics at Cornell University.

But for inflation-worn economies, economists say the influx of low-cost Chinese goods comes with a silver-lining: lower costs for consumers. That in turn could offer central banks some relief as they juggle lowering living costs while reviving growth on the back of rising trade tensions.

For markets with limited manufacturing bases, such as Australia, cheap Chinese imports could ease the cost-of-living crisis and help bring down inflationary pressure, said Nick Marro, principal economist at Economist Intelligence Unit.

Emerging growth risks and subdued inflation may pave the way for more rate cuts across Asia, according to Nomura, which expects central banks in the region to further decouple from the Fed and deliver additional easing.

The investment bank predicts Reserve Bank of India to deliver additional rate cuts of 100 basis points during rest of the year, central banks in Philippines and Thailand to cut rates by 75 basis points each, while Australia and Indonesia could lower rates by 50 basis points, and South Korea by a quarter-percentage-point.

‘China shock’

In Singapore, the rise in costs of living was among the hot-button issues during the city-state’s election campaigning in the lead up to the polls held last month.

Core inflation in the country could surprise at the lower end of the MAS forecast range, economists at Nomura said, citing the impact of influx of cheap Chinese imports.

The city-state is not alone in witnessing the disinflationary impact as low-cost Chinese goods flood in.

Countries are balancing US tariff threats with Chinese overcapacity: Eswar Prasad

“Disinflationary forces are likely to permeate across Asia,” added Nomura economists, anticipating Asian nations to feel the impact from “China shock” accelerating in the coming months.

Asian economies were already wary of China’s excess capacity, with several countries imposing anti-dumping duties to safeguard local manufacturing production, even before the roll-out of Trump’s sweeping tariffs.

In the late 1990s and early 2000s, the world economy experienced the so-called “China shock,” when a surge in cheap China-made imports helped keep inflation low while costing local manufacturing jobs.

A sequel of sorts appears to be under way as Beijing focuses on exports to offset the drag in domestic consumption.

Chinese exports to the ASEAN bloc rose 11.5% year on year in the first four months this year, as shipments to the U.S. shrank 2.5%, according to China’s official customs data. In April alone, China’s shipments to ASEAN surged 20.8%, as exports to U.S. plunged over 21% year on year.

These goods often arrive at a discount. Economists at Goldman Sachs estimate Chinese products imported by Japan in the past two years to have become about 15% cheaper compared to products from other countries.

IndiaVietnam and Indonesia have imposed various protectionist measures to provide some relief for domestic producers from intense price competition, particularly in sectors facing overcapacity and cheap imports.

While for a large number of countries an influx of Chinese goods is a trade-off between lower inflation and the adverse impact on local production, countries such as Thailand could be facing a double-edged sword.

Thailand will likely be the hardest-hit by “China shock,” even sliding into a deflation this year, Nomura economists predict, while India, Indonesia and the Philippines will also see inflation falling below central banks’ targets.

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Friday’s jobs report likely will show hiring cooled in May. What to expect

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There seems little doubt now that hiring slowed considerably in May as companies and consumers braced for higher tariffs and elevated economic uncertainty. The main question is by how much.

A small dip from the recent trend likely wouldn’t be viewed as worrisome. But anything beyond that could set off a fresh round of fears about the labor market and broader economy, possibly pushing the Federal Reserve into a quicker-than-expected interest rate action.

Economists expect that when the Bureau of Labor Statistics reports the May nonfarm payroll numbers (NFP) Friday at 8:30 a.m. ET, they will show a gain of just 125,000, down from an initial tally of 177,000 in April and the year-to-date monthly average of 144,000. That represents a slide but not a collapse, and markets will hinge on the degree of decline.

“Going into the NFP print, expectations have been reset lower and a reading of around 100,000 (vs. the 125,000 expected by the consensus) could fall in the ‘not-as-bad-as-feared'” camp, wrote Julien Lefargue, chief market strategist at Barclays Private Bank. “Anything below the 100,000 mark could reignite recession fears, while a stronger-than-expected print could perversely be negative for risk assets as it would likely put upward pressure on [Treasury] yields.”

Consequently, the report will be a balancing act between competing concerns of a slowing labor market and rising inflation.

Data tell different stories

A broad range of sentiment indicators, including manufacturing and services surveys as well as gauges of small business sentiment, indicate flagging optimism toward the economy, led by worries over tariffs and the inflation they could ignite.

Moreover, hard data this week from ADP showed that private payrolls essentially were flat last month, growing by just 37,000 in May, a two-year low. Jobless claims also have also recently been edging higher, with last week hitting the highest since October.

Friday’s payroll report, then, could be a key arbiter in determining just how much worry there is in the economy where it counts, namely the labor market, which in turn provides clues about the strength of consumers who drive nearly 70% of all U.S. economic activity.

“We do think it’s going to slow down. We do think that tariffs are going to start biting a little bit,” said Dan North, senior economist at Allianz Trade North America. “Everybody hates the economy, but if you look at the hard data, it’s not so bad.”

North expects it will still take several months before the sentiment surveys — “soft” data — take their toll on other economic readings, such as payrolls.

Tariff impacts are key

In the interim, markets will be watching further developments on the trade front as President Donald Trump continues in a 90-day negotiating window that investors hope will ease some of the “Liberation Day” tariffs that are on pause.

“We don’t expect to see a crash this month, probably not the month after this, but certainly a weight on the economy, not just from the tariffs but also from uncertainty. It’s as if tariff policy is a specter in the mist,” North said.

There are a variety of views on Wall Street, from Goldman Sachs, which expects a below-consensus 110,000 growth in payrolls, to Bank of America, which is looking more for a number around 150,000.

From there, investors will try to figure out whether the latest numbers move the needle on Fed policy, with markets currently not expecting further interest rate cuts until September. Most policymakers of late have been focusing on tariff-induced inflation impacts, with the caveat that they are watching the jobs numbers as well.

“One encouraging sign about economic activity is the resilience of the labor market,” Fed Governor Adriana Kugler said Thursday in New York. “We will get the May employment report tomorrow, but the data in hand indicate that employment has continued to grow and that labor supply and demand remain in relative balance.”

The consensus estimate also sees the unemployment rate holding at 4.2%, while average hourly earnings are projected to show a 0.3% monthly gain and 3.7% annual increase.

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