Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, March 6, 2025

AI Summary. Companies worldwide returned $4.09tn in cash to shareholders in a recent year, comprising $2.56tn in dividends and $1.53tn in stock buybacks. Most of that cash is reinvested in other companies, with older, slower-growth firms returning capital that flows to growth businesses needing it.

Aswath Damodaran Musing On Markets
Date Posted:
Is Database:
Database

In 2024, American firms returned more than $1.7T to investors in buybacks and dividends. @AswathDamodaran

Does cash returned to shareholders leave the market?

Core argument: Companies worldwide returned $4.09 trillion in cash to shareholders in 2024, comprising $2.56 trillion in dividends and $1.53 trillion in stock buybacks.

In 2024, companies across the globe returned $4.09 trillion in cash to their shareholders, with $2.56 trillion in dividends and $1.53 trillion taking the form of stock buybacks. If you are wondering how the market can withstand this much cash being withdrawn, it is worth emphasizing an obvious, but oft overlooked fact, which is that the bulk of this cash found its way back into the market, albeit into other companies. In fact, a healthy market is built on cash being returned by some businesses (older, lower growth) and being plowed back into growth businesses that need that capital. Not surprisingly, the bulk of the cash being returned is from money making firms, but the percentages of firms that are money making does vary widely across sectors.

Takeaways by Macro Roundup® AI

  1. Companies worldwide returned $4.09 trillion in cash to shareholders in 2024, comprising $2.56 trillion in dividends and $1.53 trillion in stock buybacks.
  2. The bulk of the cash returned to shareholders in 2024 found its way back into the market, into other companies, rather than leaving equities.
  3. Most of the cash returned to shareholders comes from money-making firms, though the percentage of firms that are profitable varies widely across sectors.

Related Articles:

  • Cicadian Rhythms — The authors see limited signs of the profit or capital spending declines that often accompany recessions, noting that unlike prior yield-curve inversions the corporate sector is running a surplus with stable interest expense. They flag fading disinflationary-boom prospects as a risk to price-to-earnings multiples, particularly for technology stocks.
  • Which One Is It? Equity Issuance and Retirement — U.S. public companies issued nearly $10tn in equity and retired just over $14tn, with equity-financed mergers and acquisitions making up 58% of issuance, stock-based compensation 22%, and other non-IPO share sales 20%. Firms with low stock-based compensation and high buybacks had the highest average and median total shareholder returns, though the authors note other factors likely drove these returns.
  • Data Update 6 for 2025: From Macro to Micro – The Hurdle Rate Question — Valuation errors stem mainly from mistaken forecasts of growth, profitability, or reinvestment rather than from the discount rate, and no great company achieved greatness by finessing its cost of capital. The author suggests valuing a mature US company using the 8.35% median cost of capital and focusing analysis on growth and profit prospects.

AI Summary. New "synthetic real-time" estimates of the U.S. neutral real interest rate, built from data available at each point in time, show two large swings: a roughly 1.75 percentage point rise and reversal around the late-1990s productivity boom, and a 1.5 point decline after the financial crisis. The latest estimate sits slightly above pre-pandemic levels.

Sophia Cho and John Williams Federal Reserve Bank of New York
Date Posted:
Is Database:
Database

The authors reestimate Williams’ models using vintage data. From 1995-2011, estimated trend growth explains most of the drift in this “real-time” R-star. From 2012-2019, the rise in trend growth was offset by a falling trend in other factors.

How has the U.S. neutral real interest rate shifted over time?

Core argument: Synthetic real-time estimates of r-star from the Holston-Laubach-Williams model show two large moves: a 1-3/4 percentage point rise and subsequent reversal during the late-1990s and early-2000s productivity boom, and a 1-1/2 percentage point decline following the global financial crisis and Great Recession.

[We present] new “synthetic real-time” estimates of r-star in the U.S. for the Holston-Laubach-Williams model, using vintage datasets. Real-time estimates answer the question: “What is the value of r-star based on the information available at the time?” Changes in real-time estimates of trend growth explain most of the persistent movements in HLW real-time estimates of r-star from the mid-1990s to 2011. From 2012 to 2019, estimates of z trended lower, offsetting the rise in estimates of trend growth. This pattern of rising estimates of trend growth and declining estimates of z has continued since the onset of the pandemic. The net effect is that the most recent estimate of r-star is slightly above estimates from 2019. The estimates reveal two episodes of large movements in r-star: a 1-3/4 percentage point rise and subsequent reversal during the productivity boom of the late 1990s and early 2000s and a sharp 1-1/2 percentage point decline following the global financial crisis and Great Recession. In between these two episodes, real-time estimates of r-star are remarkably stable, at around 2-1/4 percent during the mid-2000s and ½ percent during the 2010s.

Takeaways by Macro Roundup® AI

  1. Synthetic real-time estimates of r-star from the Holston-Laubach-Williams model show two large moves: a 1-3/4 percentage point rise and subsequent reversal during the late-1990s and early-2000s productivity boom, and a 1-1/2 percentage point decline following the global financial crisis and Great Recession.
  2. Between those two episodes, real-time r-star estimates were stable at around 2-1/4 percent during the mid-2000s and around 1/2 percent during the 2010s.
  3. Changes in real-time estimates of trend growth explain most persistent movements in HLW real-time r-star from the mid-1990s to 2011, while from 2012 to 2019 and since the pandemic's onset declining estimates of z offset rising trend growth, leaving the most recent r-star slightly above 2019 estimates.

Related Articles:

  • Data Update 4 for 2025: Interest Rates, Inflation and Central Banks! — Interest rates are ultimately driven by macroeconomic fundamentals, with an "intrinsic risk-free rate" defined as the sum of the inflation rate and real GDP growth tracking the observed 10-year Treasury bond yield closely. On this view, central banks' influence comes from preferential access to data on those fundamentals, their capacity to alter them, and their credibility.
  • Our Thoughts on Large US Deficits and Their Impact on Bond Yields — Total borrowing in the US is about average despite high government deficits, as high public borrowing has contributed to the need for higher interest rates that have depressed private sector borrowing. Risk premiums on long-dated debt look about average, with no market signs that economic or debt limits are currently being hit.
  • Recent Movements in R*: The Most Important Interest Rate That You Have Never Heard Of — The natural rate of interest — the inflation-adjusted rate prevailing when the economy grows at trend with inflation at target — is unobservable and uncertain, but most estimates have risen and sit above pre-pandemic levels. The data lean toward a long-run natural rate higher than pre-pandemic and possibly above Federal Reserve projections.

AI Summary. The US said it will exempt Mexico from new 25% tariffs on goods and services covered by the US-Mexico-Canada trade agreement, and has already said Canadian autos and auto parts imported under the deal would be exempt.

Josh Wingrove Bloomberg
Date Posted:

Trump will exempt Mexico from his 25% tariff until April; Trump is weighing a broader exemption to the tariff for goods covered by the USMCA.

Are goods under the North American trade deal exempt from tariffs?

Core argument: President Trump said he will exempt Mexico from his 25% tariffs on goods and services covered by the USMCA trade agreement until April 2, describing the move as an accommodation following a call with Mexican President Claudia Sheinbaum.

President Trump said he will exempt Mexico from his new 25% tariffs on any goods and services that fall under the North American trade agreement known as USMCA, offering a reprieve for a major US trading partner. “This Agreement is until April 2nd,” Trump said in a social media post Thursday after speaking with Mexican President Claudia Sheinbaum. “I did this as an accommodation, and out of respect for, President Sheinbaum.” The decision came shortly after Commerce Secretary Howard Lutnick said Trump was weighing an exemption for both Mexican and Canadian goods under the agreement, saying he expected Trump to officially decide the scope of the delay on Thursday. “If you lived under Donald Trump’s US, Mexico and Canada agreement, you will get a reprieve from the tariffs now. And if you do choose to go outside of that, you did so at your own risk, and today is when that reckoning comes,” Lutnick said in an interview with CNBC. It’s not clear that Trump will extend the full USMCA pause to Canada, though he has already said he would exempt Canadian autos and auto parts that are imported under the trade deal.

Takeaways by Macro Roundup® AI

  1. President Trump said he will exempt Mexico from his 25% tariffs on goods and services covered by the USMCA trade agreement until April 2, describing the move as an accommodation following a call with Mexican President Claudia Sheinbaum.
  2. Commerce Secretary Howard Lutnick said goods traded under the USMCA will get a reprieve from the tariffs, while those falling outside the agreement face a "reckoning," and said he expected Trump to decide the delay's scope.
  3. Trump has not said whether the full USMCA tariff pause will extend to Canada, though he already said he would exempt Canadian autos and auto parts imported under the agreement.

Related Articles:

  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.
  • The Fiscal, Economic, and Distributional Effects of 20% Tariffs on China and 25% Tariffs on Canada and Mexico — The authors estimate that 25% tariffs on Canada and Mexico plus 20% tariffs on China raise the US effective tariff rate by 7 percentage points to its highest since 1943, lifting the price level 1.0–1.2% and costing households an average $1,600–2,000. They project the economy is persistently 0.3–0.4% smaller.
  • From Here to Eternity — US policy shifts can reverse quickly: an Eisenhower-era deportation surge reached 1.1m people before funding and political support collapsed, cutting deportations over 90% to 90,000 within two years. McKinley-era tariffs were followed by an inflation spike and a 100-seat Republican loss, the third largest House defeat since the Civil War.

AI Summary. A widely used index of U.S. economic policy uncertainty, built from news coverage and disagreement among professional forecasters, has reached its highest recorded level outside the pandemic. Regional Federal Reserve surveys of manufacturers point to less investment and higher prices, and the author argues constant policy volatility raises the cost of capital and discourages hiring and investment.

Matt Klein The Overshoot
Date Posted:

.@M_C_Klein argues that “policy arbitrariness” is already “contributing to faster inflation and a deteriorating growth outlook in the US.” He is concerned uncertainty will compound.

Does policy uncertainty reduce investment and raise prices?

Core argument: U.S. Economic Policy Uncertainty, estimated by economists Scott Baker, Nick Bloom, and Steve Davis from news articles, forecaster disagreement, and other sources, has soared since the election to its highest level recorded outside the pandemic.

People can adapt to bad policies, but it is impossible to adapt when both the business environment changes on a daily or even hourly basis. In this world, the most rational choice is to hoard and wait. The costs of this constant policy volatility will cumulate over time, raising the cost of capital and discouraging hiring and investment. Since the election, U.S. “Economic Policy Uncertainty” estimated by the economists Scott Baker, Nick Bloom, and Steve Davis from news articles, professional forecasters’ disagreements, and other sources has soared to the highest level ever recorded outside of the pandemic. Five of the regional Federal Reserve Banks have been running detailed surveys of manufacturers in their district for at least two decades. They ask questions on everything from employment to capital spending plans to inventories and more. The latest surveys, which are from early-to-mid February, and therefore do not even capture the latest spikes in policy volatility, are painting a consistent and unwelcome picture: less investment and higher prices.

Takeaways by Macro Roundup® AI

  1. U.S. Economic Policy Uncertainty, estimated by economists Scott Baker, Nick Bloom, and Steve Davis from news articles, forecaster disagreement, and other sources, has soared since the election to its highest level recorded outside the pandemic.
  2. Surveys of manufacturers run by five regional Federal Reserve Banks for at least two decades point, in their early-to-mid February readings, to less investment and higher prices, before the latest spikes in policy volatility.
  3. Constant policy volatility makes hoarding and waiting the rational choice, with costs that cumulate over time, raising the cost of capital and discouraging hiring and investment, the article argues.

Related Articles:

  • German Borrowing Costs Soar By Most Since 1997 on ‘Historic’ Debt Deal — Germany's incoming governing partners agreed to exempt defense spending above 1% of GDP from the constitutional borrowing limit, create a €500bn off-budget vehicle for debt-funded infrastructure, and loosen borrowing rules for states. Goldman Sachs estimated the package could lift German growth to as much as 2%, versus its 0.8% forecast, if approved and implemented quickly.
  • Short-Term Pain, Long-Term Gain? — A trade war is by definition a stagflation shock, raising prices while lowering sales, and persistent policy uncertainty could lead consumers and firms to hold back spending and hiring. If tariffs on Canada and Mexico persist for months, the Federal Reserve is likely to focus on a rising unemployment rate and begin cutting rates.
  • Microsoft Dropped Some AI Data Center Leases, TD Cowen Says — Microsoft has voided data center leases totaling a couple of hundred megawatts of capacity and stopped converting preliminary agreements into formal leases, according to brokerage TD Cowen's checks with supply chain providers. TD Cowen also says Microsoft is redirecting some planned international spending to the US, suggesting a material slowdown in international leasing.

AI Summary. New US tariff actions cover $1.3tn in imports, or roughly 42% of all goods entering the United States, and would impose an effective tariff rate of 11.5%, or more than $370bn, if households and firms imported the same goods from the same countries as the prior year. Combined, they represent the largest tariff increase since the Smoot-Hawley Act.

Apricitas Economics Joseph Politano
Date Posted:

Trump’s latest proposed tariffs, including the lagging tariffs on autos, cover 42% of American imports, with an effective tariff rate of 11.5%, “the single-largest tariff hike since the infamous Smoot-Hawley Act of nearly a century ago.” @JosephPolitano

How large is the new tariff increase on US imports?

Core argument: Trump's tariff actions cover $1.3T in US imports, roughly 42% of all goods brought into the United States.

The costs of these actions are enormous, covering $1.3T in US imports or roughly 42% of all goods brought into the United States. If households and companies tried simply to import the same goods from the same countries as last year, they would now be forced to pay an 11.5% effective tariff or more than $370B in total. Sustained, any one of these actions would exceed the total impact of Trump’s entire first-term trade wars, but combined they represent the single-largest tariff hike since the infamous Smoot-Hawley Act of nearly a century ago.

Takeaways by Macro Roundup® AI

  1. Trump's tariff actions cover $1.3T in US imports, roughly 42% of all goods brought into the United States.
  2. Importing the same goods from the same countries as last year would now carry an 11.5% effective tariff, or more than $370B in total.
  3. Sustained, any one of Trump's tariff actions would exceed the total impact of his entire first-term trade wars, and combined they represent the single-largest tariff hike since the Smoot-Hawley Act of nearly a century ago.

Related Articles:

AI Summary. Young women use social media more than young men and are more likely to encounter accounts featuring LGBTQ topics, and research finds young women identifying as gay, lesbian, bisexual or queer are much more active on these platforms than straight women of the same age.

Daniel Cox, Jae Grace and Avery Shields American Storylines
Date Posted:

31% of US women ages 18-29 now identify as LGBTQ up from 9% a decade ago. @dcoxpolls notes that young women are significantly more active on social media and exposed to LGBTQ topics, which may lead them to adopt more fluid sexual identities.

Does social media use help explain rising LGBTQ identification among young women?

Core argument: Young women are significantly more active on social media than young men and, given gendered habits online, are more likely to encounter accounts featuring LGBTQ topics, which the author finds a compelling explanation.

Young women are significantly more active on social media than young men, and given gendered habits online, they are more likely to be exposed to accounts that feature LGBTQ topics. Our research also shows that young women who identify as gay, lesbian, bisexual or queer are much more active on social media platforms than women of the same age who are straight. For me, this is a compelling explanation. One recent study found that repeated exposure to information describing “sexual orientation existing on a continuum” led respondents to adopt more fluid sexual identities or to express greater uncertainty about their sexual orientation.

Takeaways by Macro Roundup® AI

  1. Young women are significantly more active on social media than young men and, given gendered habits online, are more likely to encounter accounts featuring LGBTQ topics, which the author finds a compelling explanation.
  2. The author's research shows young women who identify as gay, lesbian, bisexual, or queer are much more active on social media platforms than straight women of the same age.
  3. One study found that repeated exposure to information describing sexual orientation as existing on a continuum led respondents to adopt more fluid sexual identities or express greater uncertainty about their sexual orientation.

Related Articles:

AI Summary. Ukraine reported making over one million first-person-view drones in a year while Russia claims output of 4,000 daily, with both aiming for three to four million annually. Drones now hunt other drones, act as motherships for swarms, and explosive-laden naval vessels target ships hundreds of miles away.

Marc Santora, Lara Jakes, Andrew Kramer, Marco Hernandez and Liubov Sholudko New York Times
Date Posted:

Drones have displaced artillery as the primary cause of casualties in the Russo-Ukrainian War, with 70% of all Russian and Ukrainian casualties inflicted by drones according to some Ukrainian estimates. US military leaders are taking note.

How are mass-produced drones reshaping modern warfare?

Core argument: Ukrainian officials said they produced more than one million first-person-view drones in 2024, while Russia claims output of 4,000 per day, with each country aiming to make three to four million drones in 2025.

Ukrainian officials said they had made more than one million first-person-view drones in 2024. Russia claims it can churn out 4,000 every day. Both countries say they are still scaling up production, with each aiming to make three to four million drones in 2025. Drones armed with shotguns are now shooting down other drones. Antiaircraft drones are being designed to take out surveillance drones flying higher in the sky. Larger drones are being developed to serve as motherships for swarms of small drones, increasing the distance they can fly and kill. Crude Ukrainian robotic vessels packed with explosives sail hundreds of miles across choppy waters to target enemy ships. The commander of Ukraine’s naval forces said, “This is not just a tactical tool but a strategic shift in the approach to naval warfare,” [he] crediting the drones with “altering the balance of power in the Black Sea.” American military leaders have noted the Ukrainian approach to see if there are lessons should China make a move to attack Taiwan.

Takeaways by Macro Roundup® AI

  1. Ukrainian officials said they produced more than one million first-person-view drones in 2024, while Russia claims output of 4,000 per day, with each country aiming to make three to four million drones in 2025.
  2. Drones armed with shotguns are shooting down other drones in Ukraine, antiaircraft drones are being designed to hit higher-flying surveillance drones, and larger mothership drones are being developed to extend the range of small-drone swarms.
  3. The commander of Ukraine's naval forces called explosive-packed robotic vessels that sail hundreds of miles "not just a tactical tool but a strategic shift in the approach to naval warfare," crediting the drones with "altering the balance of power in the Black Sea.".

Related Articles:

  • Pentagon Plans Vast AI Fleet to Counter China Threat — The Pentagon plans to field thousands of air-, land- and sea-based artificial-intelligence systems, drones and autonomous platforms within two years to counter threats from China and other adversaries, spending hundreds of millions of dollars on systems intended to be "small, smart, cheap.
  • The New Frontier for Drone Warfare Is Deep Underwater — New underwater drones can dive thousands of feet and operate for days with little human intervention, which advocates say suits them to intelligence gathering, protecting undersea infrastructure, and countering threats in the Pacific. Boeing is delivering five 85-foot Orca vehicles to the US Navy, and Australia is developing Ghost Shark with Anduril.
  • Pentagon Plan to Buy Thousands of Drones Faces Looming Snags — The US Department of Defense aims to buy thousands of low-cost drones within as little as 18 months and up to 2,000 larger uncrewed jets, while one of its primary drone suppliers produced 38 aircraft last year. Booming commercial aerospace demand has left shortages of skilled labor, raw materials, and parts such as advanced electronics and fasteners.

Friday, March 7, 2025

AI Summary. The authors estimate that expanded access to oral contraception and abortion shifted childcare workforce composition toward less-educated women, raising lower-skilled childcare employment 69% and cutting higher-skilled employment 20% relative to each group's average. They attribute 57% of the lower-skilled increase to abortion access and estimate the higher-skilled share would have been 1.43x higher without the pill.

Chris Herbst and Erdal Tekin National Bureau of Economic Research
Date Posted:

Herbst and @Erdal_Tekin_ find that “the share of higher-skilled women in child care would have been 1.43 times higher had the pill not been made accessible,” while access to abortion facilitated the movement of low-skilled women into child care.

How did expanded contraception and abortion access reshape the childcare workforce?

Core argument: The authors estimate that full abortion access between ages 14 and 21 raised the likelihood of child care employment by 1.1 percentage points among less-skilled women, a 69% increase from that skill group's mean.

Leveraging state-by-birth cohort variation in access to oral contraceptives and abortion, we find that expanded access throughout the 1960's and 1970's significantly increas[ed] the proportion of less-educated women in the [Childcare] sector while reducing the share of highly-educated workers, [resulting in] a decline in average education levels and wages within the child care workforce. The estimates in Table 1 imply that exposure to abortion access every year between ages 14 and 21 (hereafter called “full access”) increased the likelihood of child care employment by 1.1 percentage points among less-skilled women while full access to the pill reduced the likelihood of child care employment by 0.3 percentage points among higher-skilled women. These effects imply a 69% increase in lower-skilled child care employment and a 20% reduction in higher-skilled employment from the means of each skill group. Our results imply that 57% of the increase in lower-skilled employment can be attributed to an increase in abortion access, and that the share of higher-skilled women in child care would have been 1.43 times higher had the pill not been made accessible.

Takeaways by Macro Roundup® AI

  1. The authors estimate that full abortion access between ages 14 and 21 raised the likelihood of child care employment by 1.1 percentage points among less-skilled women, a 69% increase from that skill group's mean.
  2. The authors estimate that full access to the pill reduced the likelihood of child care employment by 0.3 percentage points among higher-skilled women, a 20% reduction from their mean, and that the higher-skilled share in child care would have been 1.43 times higher absent pill access.
  3. The authors find that expanded access to oral contraceptives and abortion in the 1960s and 1970s raised the share of less-educated women in the child care sector and reduced the share of highly educated workers, lowering average education levels and wages in that workforce.

Related Articles:

AI Summary. An analytics firm estimates that 50% of Mexican exports and 38% of Canadian exports entered the U.S. duty-free under the North American trade pact, while about 40% of U.S. imports from the two countries entered duty-free outside it, leaving roughly 10% of Mexican and 22% of Canadian exports facing any tariffs.

Chao Deng Wall Street Journal
Date Posted:

In 2024, the US imported $1B of duty-free goods per day from Canada and Mexico under USMCA. Firms may be liable for $250mm per day in new tariffs.

How much of Canadian and Mexican exports actually face tariffs?

Core argument: Trade Partnership Worldwide estimated that in 2024 about 10% of Mexican exports to the U.S. faced any tariffs, with 50% entering duty-free under USMCA, while roughly 40% of U.S. imports from Canada and Mexico fell outside USMCA yet still entered duty-free.

The analytics firm Trade Partnership Worldwide (TPW) estimated that in 2024, 50% of Mexican exports and 38% of Canadian exports entered the U.S. duty-free under USMCA. About 40% of U.S. imports from Canada and Mexico fell outside USMCA but still passed through duty-free. The U.S. imposes no tariffs on a host of products, regardless of the supplier country. Only about 10% of total Mexican exports to the U.S. in 2024 faced any tariffs at all. In 2024, only about 22% of Canadian exports to the U.S. faced any tariffs. This included nearly all oil with low tariff rates, rather than products that couldn’t comply with USMCA rules. Generally speaking, under the USMCA, which took effect during Trump’s first term, products enter the U.S. duty-free if businesses can show they comply with certain rules regarding the origins of those products’ components. Because USMCA rules are so complicated, businesses have sometimes chosen to pay a tariff on a given product instead of expending time and money to figure out whether it is USMCA-compliant, according to trade experts.

Takeaways by Macro Roundup® AI

  1. Trade Partnership Worldwide estimated that in 2024 about 10% of Mexican exports to the U.S. faced any tariffs, with 50% entering duty-free under USMCA, while roughly 40% of U.S. imports from Canada and Mexico fell outside USMCA yet still entered duty-free.
  2. Trade experts say USMCA's rules are complicated enough that businesses have sometimes paid a tariff on a product instead of spending time and money determining whether it qualifies as USMCA-compliant.
  3. Trade Partnership Worldwide estimated that in 2024, 38% of Canadian exports entered the U.S. duty-free under USMCA and about 22% faced any tariffs, including nearly all oil at low tariff rates.

Related Articles:

  • The Fiscal, Economic, and Distributional Effects of 20% Tariffs on China and 25% Tariffs on Canada and Mexico — The authors estimate that 25% tariffs on Canada and Mexico plus 20% tariffs on China raise the US effective tariff rate by 7 percentage points to its highest since 1943, lifting the price level 1.0–1.2% and costing households an average $1,600–2,000. They project the economy is persistently 0.3–0.4% smaller.
  • A User’s Guide to Restructuring the Global Trading System — During the 2018–2019 U.S.–China trade war, the effective tariff rate on Chinese imports rose 17.9 percentage points while the renminbi depreciated 13.7% against the dollar, leaving after-tariff import prices in dollars up just 4.1%. The author argues this currency offset of more than three-fourths of the tariff explains why inflation pressure was negligible.
  • Tariffs and Exchange Rates (and Stephen Miran) — The author argues that a universal tariff would prompt enough dollar appreciation to make US exports more expensive abroad, reducing trade flows in both directions while leaving the trade deficit roughly unchanged. Attempting to offset the export drag through deregulation would shift production away from import-competing goods, again leaving a similar trade deficit.

AI Summary. Output per hour in the U.S. steel industry has fallen 32% since 2017, following the imposition of 25% tariffs on steel imports, while output per hour for the economy as a whole rose 15%. U.S. steel-using firms, which employ roughly 45x as many Americans as steel producers, pay about 75% more for steel than global competitors.

Benn Steil and Elisabeth Harding Council on Foreign Relations
Date Posted:

Output per hour in the U.S. steel industry has fallen by 32% since 2017, before tariffs went into effect in March 2018, compared to a 15% increase for the economy overall. US steel-using firms pay 75% more for steel than their global competitors.

Have steel tariffs reduced productivity in the protected industry?

Core argument: Output per hour in the U.S. steel industry has fallen 32% since 2017, the year before President Trump imposed 25% steel import tariffs in March 2018, while economy-wide output per hour rose 15%.

Import tariffs tend to depress labor productivity in protected industries. By shielding domestic industries from foreign competition, protectionism allows less productive firms to populate the market. By reducing import competition, protectionism removes incentives for domestic firms to invest in efficiency improvements, and by hindering companies from collaboration and knowledge-sharing with foreign ones, protectionism lessens opportunities for technological advance. We looked at labor productivity in the U.S. steel industry since President Trump imposed 25% tariffs on steel imports in March 2018. The results are striking. Output per hour in the U.S. steel industry has fallen by 32% since 2017. For the economy as a whole, output per hour has increased by 15%. The result is that U.S. steel-using firms, which employ roughly 45 times the number of Americans as steel-producing ones, pay about 75% more for steel than do their competitors globally. The conclusion is clear. Steel tariffs are a bad deal for U.S. manufacturers, a bad deal for U.S. workers, and a bad deal for U.S. consumers.

Takeaways by Macro Roundup® AI

  1. Output per hour in the U.S. steel industry has fallen 32% since 2017, the year before President Trump imposed 25% steel import tariffs in March 2018, while economy-wide output per hour rose 15%.
  2. U.S. steel-using firms, which employ roughly 45 times the number of Americans as steel-producing firms, pay about 75% more for steel than their global competitors.
  3. Protectionism tends to depress labor productivity in protected industries by allowing less productive firms to populate the market, removing incentives to invest in efficiency, and limiting collaboration and knowledge-sharing with foreign companies.

Related Articles:

AI Summary. Russia's population decline has accelerated, with births falling 3.4% to 1.22m — the lowest level in roughly 25 years — while deaths rose 3.3% to 1.82m, according to Russia's Federal Statistics Service. The decline is attributed in part to Russia's war on Ukraine, though detailed mortality data has been classified and war deaths enter the statistics with long delays.

Bloomberg Staff Bloomberg
Date Posted:

Russia’s population shrank by ~ 600,000 last year, the fastest pace since the pandemic. Births were down 3.4% to the lowest level since 1999. “Its economy is already starved of labor, threatening the country’s future development and prosperity.”

Is Russia's population decline accelerating despite government pronatalist appeals?

Core argument: Russia recorded 1.22 million births in 2024, down 3.4% from 2023 and the lowest level since 1999, while deaths rose 3.3% to 1.82 million, according to the Federal Statistics Service, known as Rosstat.

Russia’s population is declining at its quickest pace since the Covid-19 pandemic, even after President Vladimir Putin declared that a demographic turnaround is the country’s most important priority. Russia recorded the lowest number of births last year in a quarter of a century, while the number of deaths increased for the first time since the height of the pandemic in 2021. In 2024, 1.22 million people, or 3.4% fewer than in 2023, were born — the lowest level since 1999 — while deaths increased by 3.3% to 1.82 million, according to the Federal Statistics Service, known as Rosstat. The pace of the population decline accelerated by roughly 20% compared to 2023, due in part to the Kremlin’s three-year-old war on Ukraine. The actual impact of the February 2022 full-scale invasion could be greater than what is currently reflected in demographic data. Those killed in the war are included in statistics with great delay, said Alexey Raksha, an independent demographer from Moscow. Detailed statistics on mortality have been classified since 2023.

Takeaways by Macro Roundup® AI

  1. Russia recorded 1.22 million births in 2024, down 3.4% from 2023 and the lowest level since 1999, while deaths rose 3.3% to 1.82 million, according to the Federal Statistics Service, known as Rosstat.
  2. Russia's population decline accelerated by roughly 20% compared with 2023, the quickest pace since the Covid-19 pandemic, due in part to the Kremlin's three-year-old war on Ukraine.
  3. Independent Moscow demographer Alexey Raksha says those killed in the war are included in statistics with great delay, and detailed mortality statistics have been classified since 2023, so the February 2022 invasion's impact could exceed what demographic data show.

Related Articles:

  • Russia’s Birth Rate Slides To Lowest In Quarter Century In 2024 — Russia's state statistics service reported 599,600 births in the first half of the year, 16,000 fewer than the same period a year earlier and the lowest count since 1999. Natural population decline accelerated, with 325,100 deaths recorded over those six months, 49,000 more than a year earlier.
  • Putin’s Existential Problem: Not Enough Russians — Russia's population has been declining for years, with Western estimates of at least 150,000 Russian battlefield deaths in Ukraine, nearly a million people leaving the country after the war began, and births at their lowest level in more than two decades. Russia has pledged to spend up to $157bn over six years on measures supporting families and children.
  • The Wealth of Working Nations — Because of population aging, growth in GDP per capita and GDP per working-age adult have diverged across advanced economies; from 1998 to 2019 Japan's accumulated growth per working-age adult was 31.9% versus 29.5% in the US. The authors find a standard neoclassical growth model calibrated to each country's working-age population tracks output per working-age adult in most economies.

AI Summary. SpaceX lost the upper-stage spacecraft of its Starship rocket shortly after liftoff during a test flight, repeating an earlier failure in which a Starship spacecraft exploded after launch. The company did recover the rocket's booster, guiding it to rest between the launchpad's "chopstick" arms.

Micah Maidenberg Wall Street Journal
Date Posted:

The 8th Starship rocket exploded; like the prior test. The booster was successfully recaptured for the third time.

Did another Starship test flight lose its upper-stage spacecraft after liftoff?

Core argument: SpaceX lost the Starship spacecraft shortly after Thursday's liftoff, repeating a January setback in which a Starship spacecraft blew up not long after launch.

SpaceX launched another Starship rocket Thursday but lost the vehicle’s spacecraft not long after liftoff. Starship has two stages: a booster and a spacecraft that is stacked on top of the booster for liftoff. The spacecraft separates from the booster shortly after launch. In January, SpaceX suffered a similar setback when a Starship spacecraft blew up not long after liftoff. Thursday’s launch marked the eighth time SpaceX launched the Starship rocket since the company started testing the vehicle in flight in April 2023. Before the explosion, SpaceX successfully recaptured the rocket’s booster, which navigated to rest between what the company calls “chopstick” arms on the launchpad. It was the third time SpaceX was able to guide down the booster, critical to the company’s longer-range ambitions to launch the rockets regularly.

Takeaways by Macro Roundup® AI

  1. SpaceX lost the Starship spacecraft shortly after Thursday's liftoff, repeating a January setback in which a Starship spacecraft blew up not long after launch.
  2. Thursday's flight was the eighth Starship launch since SpaceX began flight testing the vehicle in April 2023.
  3. SpaceX recaptured the Starship booster between the launchpad's "chopstick" arms for the third time, a capability critical to the company's longer-range ambitions to launch the rockets regularly.

Related Articles:

  • SpaceX Ship Explodes During Test Flight — SpaceX's experimental Starship spacecraft separated from its booster as designed after liftoff but then exploded, with initial data pointing to a leak that built more pressure inside the vehicle than it could vent. SpaceX said a fire in the rear of the vehicle led it to break apart and fall into predefined hazard areas in the Atlantic Ocean.
  • It’s Not a Space Race, It’s the Space Olympics — The US operates 81% of commercial satellites in orbit and 86% of global effective launch capacity, with NATO allies second in satellites at 11% and China second in launch capacity at 9%. China is pursuing mega satellite constellations and reusable rockets, in many cases copying approaches already proven by US companies.
  • Building an Enduring Advantage in the Third Space Age — The United States and China each logged their highest-ever annual launch rates, at 103 and 66 launches, while Russia fell to 19 and Europe recorded three. The US accounted for roughly half of global launches but 81% of effective launch capacity, since Falcon 9 and Falcon Heavy comprised 93% of US launches.