Why US tariffs haven’t been passed through even more to higher US prices? 1️⃣ effective rate todayis “only” 8.8% now 2️⃣ but 8Aug tariffs settling into between 15 and 20%, so the effective rate is about to double 3️⃣ radical volatility of the tariffs ended; now seem “permanent”

One by product of Trump's obsession with bilateral trade deficits is that it has brought attention to the big deficits the US runs with pharmaceutical exporting tax centers ... 1/

Brad Setser on why countries struck deals rather than retaliating against Trump tariffs, on the Security Economics podcast: Trump's credibility; what the US exports; your competitors matter, and Japan cut a deal. (On YouTube, Spotify, Apple Podcasts, etc.)

Lots of folks (including the FT!) seem puzzled by the broad strength of Chinese exports so far this year -- The answer tho seems easy. China's real exchange rate has fallen by at least 15% over the last couple of years -- giving China's exports a big boost 1/

A reminder that Trump's tariffs -- at least to date -- haven't brought global trade to a halt. China's exports are still growing, as is its trade surplus 1/

As more reciprocal tariffs take effect, it's worth noting that prices for many retail goods have been steadily rising since March. The increases may seem modest, but they are adding up. See pricinglab.org/tariff-tracker We just updated our paper with an event study showing that—after

Yes, Germany should henceforth try to follow the fiscal example of countries like Belgium, France and Italy, who have completely exhausted their own fiscal capacity and now want to convince,.. wait for it, Germany to issue debt on their behalf. Go figure.

Pakistan's Army Chief Asim Munir made his second US visit in under two months, meeting General Caine and inviting him to Pakistan. He also attended a CENTCOM leadership change ceremony. This is the real reason for the deterioration of the US-India ties, not the tariffs & Russia.

Everyone talks about how Trump is the reason for the Dollar fall, but the truth is more mundane: markets price much bigger rate cuts for the Fed than other central banks. Those cuts are predicated on inflation staying low, which is about to get tested... robinjbrooks.substack.com/p/why-the-doll…

Despite all the doomerism, the US in July had the highest services PMI among major economies. That's despite a huge rise in tariffs. I actually can't think of a better example of US "exceptionalism" than this and it contrasts markedly with market pricing for the Fed and Dollar...

This is not about H-1Bs, it's a multi-year bad tech market, esp for fresh grads, after an unusually large tech hiring spree in 2021: cyclical market contraction + companies not investing in young people + maybe a little bit of AI disruption (although I think that's overstated).

I say this without snark: The pain here is real, but it's not about immigration. H-1B holders make up a small share of the workforce. This is likely about AI, which can now code thousands of lines in seconds. That's eliminating jobs. No immigration policy will change that.

Now, as promised, on to per capita GDP. This is a more complicated calculation for various technical reasons. But however you cut it, nearly all estimates suggest UK per capita GDP between 2008 (Year of the Crash) and 2025 grew barely at all — at most 5% over 17 years, and

This year's rise in tariffs is an incredible "natural experiment." The bottom line so far is that the US economy is incredibly resilient. Services sector activity in the global PMIs is stronger than in any other major G10 economy. No recession in sight... robinjbrooks.substack.com/p/the-amazing-…

Fiscal stimulus can be a good buffer against temporary shocks. But the shock hitting Germany isn't temporary. Putin's energy shock isn't going away, nor is the flood of Chinese goods. The fix is a weaker Euro and structural reform. Not to follow the EU down the debt rabbit hole.

At the end of Feb—coinciding with the first tariffs—the US experienced a broad-based turning point in inflation trends. Over the past year, >75% of ex-shelter CPI weights we track have shown positive structural breaks in trend inflation. These shifts reveal the breadth of price

Just a reminder that the Big (not so) Beautiful Bill taxes the foreign profits of American firms at 14%, 2/3rd the rate on US profits ...

The large decline in Germany's industrial production overstates the decline in German industry. This is due to the growing importance of activities such as industry services and R&D not captured by industrial production, but captured in value add. This divergence is set to stay.

It's no coincidence that Chinese exports are flooding all over the place. US tariffs are making the US market harder to access, so Chinese exports are having to seek out new markets. But they only way they can do that: cut prices on their goods. Deflationary shock for China...

Not really sure that Singapore's story can be told completely without mentioning its role as a hub for multinational tax avoidance ... 1/