US shutdown enters second week: What’s at stake for world economy?

Dubai: The U.S. government officially shut down on October 1, 2025, after lawmakers in Washington failed to pass a budget to fund federal agencies for the new fiscal year. It’s a familiar drama in American politics — but one that affects millions of people, businesses, and even the global economy.

So, what’s going on this time, and how long could it drag on?

No deal in sight yet

Right now, there’s no clear end date. Both Democrats and Republicans are holding firm on their positions, and analysts say the standoff could stretch for weeks. As of October 6, there haven’t been any real signs of negotiation.

For perspective, the longest U.S. government shutdown lasted 35 days, between December 2018 and January 2019. Another in 2013 ran for 16 days. Historically, shutdowns tend to end once political or public pressure builds — usually when federal employees start missing paychecks after about two weeks.

That moment is approaching fast.

What’s causing the fight

This time, the main sticking point is healthcare subsidies. Democrats want any new funding deal to include an extension of Affordable Care Act (ACA) premium tax credits. These credits help millions of Americans pay for health insurance, but they’re due to expire at the end of this year. Without an extension, healthcare premiums could jump sharply in 2026.

Republicans, who currently control both chambers of Congress and the White House, are refusing to tie the healthcare issue to the funding bill. They’re pushing for a “clean” short-term deal — known as a Continuing Resolution (CR) — that would reopen the government until November 21, buying time for more talks later.

President Donald Trump has also hinted at using the shutdown to pursue long-term spending cuts and reduce federal jobs, adding another layer of tension to the debate.

What could end the shutdown

The government will only reopen once Congress passes, and the President signs, new funding legislation. That could happen through a short-term CR — which has been the outcome of every shutdown since 1990 — or a full-year spending package, which would take much longer to agree on.

Shutdowns don’t just hit Washington. They disrupt federal services, delay data releases, and can rattle investor confidence. For businesses that rely on U.S. government contracts or trade data, the impact can be real.

For now, all eyes are on Capitol Hill. Unless one side gives ground soon, America — and much of the global market — could be in for another long political standoff.