Edward Conard

Top Ten New York Times Bestselling Author

  • “…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
  • “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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, October 10, 2025

AI Summary. The Congressional Budget Office estimates the federal budget deficit was $1.8tn in fiscal year 2025, $8bn below the prior year, as revenues rose an estimated $308bn (6%) and outlays rose $301bn (4%). Customs duties including tariffs rose $118bn (153%), and net interest on the public debt surpassed $1tn for the first time.

Kathleen Burke and Aldo Prosperi Congressional Budget Office
Date Posted:
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The CBO estimates that the deficit in FY 2025 was (-)1,809B, ~unchanged from the previous year. Both receipts and outlays rose by ~$300B. Customs duties (including tariffs) rose by $118B (153%). Net interest on the debt surpassed $1T for the first time.

Did rising tariff revenue keep the federal deficit from growing?

Core argument: The Congressional Budget Office estimates the federal deficit was $1.8 trillion in fiscal year 2025, $8 billion less than in fiscal year 2024, with revenues up an estimated $308 billion (6%) and outlays up an estimated $301 billion (4%).

The federal budget deficit was $1.8 trillion in fiscal year 2025, the CBO estimates, $8 billion less than the shortfall recorded during fiscal year 2024. Revenues increased by an estimated $308 billion (or 6%); increases in collections of individual income taxes and customs duties were partially offset by a decline in corporate tax receipts. Receipts from customs duties (including tariffs) increased by $118 billion (or 153 percent) relative to fiscal year 2024. Outlays rose by an estimated $301 billion (or 4%). Outlays were higher in several areas, including the largest benefit programs and net interest on the public debt (which, for the first time, surpassed $1 trillion). Decreases in outlays recorded for federal student loan programs, deposit insurance, and by the Small Business Administration partly offset those increases. The change in the deficit was influenced by the timing of outlays in fiscal year 2024, which were reduced because payments that were due on October 1, 2023, a Sunday, were shifted into fiscal year 2023 (they were made in September 2023). If not for those shifts, the 2025 deficit would have been $80 billion (or 4%h) less than the shortfall in 2024.

Takeaways by Macro Roundup® AI

  1. The Congressional Budget Office estimates the federal deficit was $1.8 trillion in fiscal year 2025, $8 billion less than in fiscal year 2024, with revenues up an estimated $308 billion (6%) and outlays up an estimated $301 billion (4%).
  2. Receipts from customs duties, including tariffs, rose $118 billion (153%) relative to fiscal year 2024, while net interest on the public debt surpassed $1 trillion for the first time, according to the Congressional Budget Office.
  3. The Congressional Budget Office notes that absent the timing shift of payments due October 1, 2023, into fiscal year 2023, the 2025 deficit would have been $80 billion (4%) less than the 2024 shortfall.

Related Articles:

  • Fiscal Risk from Rising Bond Yields — US interest rates fell for roughly 40 years before the pandemic, allowing maturing high-coupon debt to be refinanced at lower rates and keeping federal interest expense manageable even as debt rose. Because Congressional Budget Office projections assume the 10-year Treasury yield drifts down to 3.8% from about 4.1%, the author argues its debt-service projections face upside risk.
  • Tariffs Are Generating Meaningful New Revenue — New U.S. tariffs are estimated to generate $1.3tn in net new revenue through the end of the current presidential term and $2.8tn through 2034 before economic effects, about $600bn more than previously enacted tariffs. If a court ruling striking down some tariffs is upheld, the remainder could raise as little as $800bn through 2034.
  • 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.

AI Summary. The US president threatened a "massive increase" in tariffs on China and raised the possibility of cancelling a planned summit with China's leader, accusing China of becoming "very hostile" in reference to its export controls on critical minerals.

Demetri Sevastopulo and Peter Wells Financial Times
Date Posted:

Responding to the unveiling of new Chinese export controls, Donald Trump threatened to cancel his upcoming meeting with Xi and said he is considering a “massive increase” in US tariffs on China.

Will export controls on critical minerals trigger a tariff escalation?

Core argument: Donald Trump said he was considering a "massive increase" in US tariffs on China and threatened to cancel his planned summit with Xi Jinping, reigniting trade tensions between the two countries.

Donald Trump warned that he was considering a “massive increase” in US tariffs on China and threatened to cancel his planned summit with Xi Jinping, reigniting trade tensions between the countries. The US president on Friday accused China of becoming “very hostile” in a reference to its recent decision to impose export controls on critical minerals. Trump said in a Truth Social post that the US had been contacted by “other Countries who are extremely angry at this great Trade hostility, which came out of nowhere”.

Takeaways by Macro Roundup® AI

  1. Donald Trump said he was considering a "massive increase" in US tariffs on China and threatened to cancel his planned summit with Xi Jinping, reigniting trade tensions between the two countries.
  2. Trump accused China of becoming "very hostile," referring to its recent decision to impose export controls on critical minerals.
  3. Trump said in a Truth Social post that the US had been contacted by "other Countries who are extremely angry at this great Trade hostility, which came out of nowhere".

Related Articles:

  • China Unveils Sweeping Rare-Earth Export Controls To Protect ‘National Security’ — China has imposed export controls requiring its approval for foreign companies to export magnets containing as little as 0.1% Chinese-sourced rare earths or made using Chinese extraction, refining, or magnet-making technology. China controls roughly 70% of rare earth mining, 90% of separation and processing, and 93% of magnet manufacturing.
  • Pentagon to Take Stake in Rare-Earth Company, Challenging China’s Control — Under a deal with the largest U.S. rare earths miner, the Defense Department will take a 15% stake, commit billions of dollars to investment and output purchases, and guarantee a price floor for rare earth minerals and magnets. The agreement calls for a new magnet factory, expected online in 2028, at a scale far exceeding current U.S. magnet production.
  • Why Every Country Needs To Master The Electric Tech Stack — Drones are the foundation of hard power in the early 21st century, so a country unable to produce them domestically is at a disadvantage. As electric motors overtake combustion engines as the core technology that makes machines move, the same supply chains and production processes used for electronics can also produce cars, drones, robots, and appliances.

AI Summary. Valuation-adjusted data on the currency composition of official foreign exchange reserves show a steady medium-term shift out of the US dollar that predates recent trade disputes, with dollar allocations stable most recently. The euro's share has held steady, while the Australian dollar, Canadian dollar, Chinese yuan, Japanese yen and smaller currencies gained.

Robin Brooks Robin Brooks Substack
Date Posted:

Btw 2017 and Q2 2025 reserve managers have gradually pulled out of the Dollar and shifted into other currencies. The beneficiaries – which do not include the Euro – have been the Australian Dollar, the Canadian Dollar, and the Chinese Yuan.

Are central banks shifting reserves out of the dollar, and where to?

Core argument: Valuation-adjusted COFER data show a medium-term shift out of the Dollar that preceded Trump, with reserve manager Dollar allocations stable very recently despite reciprocal tariff chaos.

Each of the charts shows the raw COFER [Currency Composition of Official Foreign Exchange Reserves] allocation share (black) alongside my valuation-adjusted measure (blue). For the most part, the medium-term trends are the same across the two measures, but there can be differences, such as in Q2 2025, when the Dollar fell sharply. Adjusting for that drop and moves in other currencies, the key medium-term trends in COFER are 1) There’s a medium-term shift out of the Dollar. This shift has been a steady trend in recent years that’s preceded Trump. In fact, reserve manager allocations to the Dollar have been stable very recently (top left chart), even with all the reciprocal tariff chaos. 2) The Euro hasn’t managed to capitalize on this Dollar exodus. Its share in global reserves is stable, especially adjusting for the large appreciation of the Euro against the Dollar in Q2 2025. 3) Beneficiaries of the USD exodus are AUD, CAD, CNY and the “other” category. More established currencies in the COFER survey - like GBP and CHF - have not benefitted. The only established currency with large, valuation-adjusted gains is JPY, something you don’t see in the headline COFER share because of the steady depreciation of the Yen against the Dollar.

Takeaways by Macro Roundup® AI

  1. Valuation-adjusted COFER data show a medium-term shift out of the Dollar that preceded Trump, with reserve manager Dollar allocations stable very recently despite reciprocal tariff chaos.
  2. The Euro has not captured the Dollar exodus, its global reserve share stable once adjusted for the Euro's large appreciation against the Dollar in Q2 2025.
  3. AUD, CAD, CNY and the "other" category are the beneficiaries of the USD exodus, while GBP and CHF have not benefitted; JPY shows large valuation-adjusted gains masked in headline COFER shares by the Yen's steady depreciation.

Related Articles:

  • Dollar Dominance and Dollar Depreciation — Moving On Different Tracks — The dollar is projected to depreciate as less exceptional US economic and market performance makes it harder to attract unhedged capital flows to fund a large current account and fiscal deficit, leaving a high currency valuation to correct further. A softening US labor market supports that view.
  • The International Role of the U.S. Dollar – 2025 Edition — The US dollar accounted for 58% of disclosed global official foreign reserves, versus 20% for the euro and 2% for China's renminbi, and roughly 50% of international payments made through the SWIFT messaging system. About 55% of international claims and 60% of liabilities are denominated in dollars, a share relatively stable since 2000.
  • Top Dollar — Foreign holdings of U.S. financial assets exceed American holdings abroad, making the United States a net debtor whose liabilities are denominated in dollars while its foreign assets are largely in other currencies. U.S. foreign liabilities grew from $30tn to over $51tn while U.S. foreign assets grew from $24tn to $33tn, tripling the net debtor position from $6tn.

AI Summary. Comparing recent graduates with others newly entering the labor market, rather than with all non-graduates of similar age, shows those without a degree are faring worse: US unemployment among recent college graduates is up 1.3 percentage points from its low, versus 2.4 points for recent entrants without a degree.

John Burn-Murdoch Financial Times
Date Posted:
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Unemployment for recent American college graduates is up 1.3pp since 2022. Unemployment for the generally younger group of non-college workers, measured at labor market entrance rather than at ages 22-27, has seen a 2.4pp rise.

Are recent graduates really faring worse than new entrants without degrees?

Core argument: US unemployment among recent labour market entrants without a degree has risen 2.4 percentage points from its mid-2022 low, nearly double the 1.3 point rise among recent college graduates.

To determine whether recent graduates are having an especially tough time in 2025’s low-hiring environment, the comparison we should make is with others who recently entered the labour market for the first time, regardless of age. A newly job-seeking graduate might be in their mid-twenties, but someone entering the world of work straight from high school will be several years younger. Once we do this, it turns out that those without a degree are actually having a much harder time of it. In the US, unemployment among recent college graduates is up 1.3 percentage points from its mid-2022 low, but by almost double that among recent labour market entrants without a degree, who have seen a 2.4 point rise. This is very different to the point rise among the frequently - much more modest 0.7 but inappropriately - cited group of non-grads in their mid-twenties who are sheltered from today’s harsh hiring conditions.

Takeaways by Macro Roundup® AI

  1. US unemployment among recent labour market entrants without a degree has risen 2.4 percentage points from its mid-2022 low, nearly double the 1.3 point rise among recent college graduates.
  2. Non-graduates in their mid-twenties, a frequently cited comparison group, show a more modest 0.7 point rise in unemployment and are sheltered from today's harsh hiring conditions, making them an inappropriate benchmark.
  3. Judging whether recent graduates face an especially tough labour market requires comparing them with others who recently entered work for the first time regardless of age, since those entering straight from high school are several years younger.

Related Articles:

  • Evaluating the Impact of AI on the Labor Market: Current State of Affairs — The dissimilarity in occupational mix between recent college graduates aged 20-24 and older workers aged 25-34 has increased slightly faster than in an earlier period, a pattern the authors say could reflect generative AI's effect on early-career employment or simply a slowing labor market. The authors caution that small sample sizes limit the findings.
  • Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence — Using payroll records covering millions of US workers, the authors find employment for workers aged 22–25 in occupations most exposed to artificial intelligence, such as software developers and customer service representatives, declined 6%, while employment for older workers in those occupations rose 6–9%. Employment in less-exposed occupations grew comparably across age groups.
  • Millions of Workers Are Left Out of the ‘Low-Hire, Low-Fire’ US Job Market — Economists expect anemic payroll growth with unemployment holding at 4.3%, a relatively low rate that masks workers stuck in unwanted jobs or underemployed. Goldman Sachs economists say labor market churn—the flow into and out of jobs—has fallen well below pre-Covid levels, and unemployment among 16-to-24-year-olds reached 10.5%.

AI Summary. Collaborative robots, or "cobots" — smaller, more flexible and less expensive than traditional industrial automation — are spreading to small US fabricators making everything from AI supercomputer parts to hulls for autonomous naval vessels. Their adoption is what makes the recovery in American goods production possible.

Christopher Mims Wall Street Journal
Date Posted:

Smaller, less expensive industrial robots dubbed collaborative robots or “Cobots” are helping to automate manufacturing in small US factories. Chris Mims argues “the slow, fragile recovery of goods production wouldn’t be possible without them.”

Are flexible, low-cost robots enabling US manufacturing's recovery?

Core argument: Collaborative robots, or "cobots," once a luxury reserved for big manufacturers, are now smaller, smarter, more flexible and less expensive, bringing automation to fabricators of every size across America.

In small factories across America, agile automatons are making everything from parts for AI supercomputers to the hulls of America’s future autonomous naval weapons. Once a luxury reserved for big manufacturers, smaller, smarter, more flexible and less expensive “cobots”—collaborative robots—are bringing automation to every fabricator, no matter the size. These robots aren’t just nice to have. The slow, fragile recovery of American goods production wouldn’t be possible without them.

Takeaways by Macro Roundup® AI

  1. Collaborative robots, or "cobots," once a luxury reserved for big manufacturers, are now smaller, smarter, more flexible and less expensive, bringing automation to fabricators of every size across America.
  2. Cobots in small American factories are producing parts for AI supercomputers and hulls for America's future autonomous naval weapons.
  3. The slow, fragile recovery of American goods production would not be possible without collaborative robots.

Related Articles:

  • Global Robot Density in Factories Doubled in Seven Years — Global factory robot density reached a record 162 robots per 10,000 manufacturing employees, more than double the level of seven years earlier. The European Union averages 219 units per 10,000 employees, North America 197, and Asia 182, with Korea, Singapore, mainland China and Japan among the ten most automated economies.
  • America Is Missing The New Labor Economy – Robotics Part 1 — Building an identical robotic arm in the US costs about 2.2x more than in China, and US-labeled components still depend heavily on Chinese parts and materials with no scalable alternative. The author argues China is the only country positioned to capture full-scale intelligent robotic automation, which would let it outcompete the US across production.
  • What Would It Take to Bring Back US Manufacturing? Part 2: Making American Manufacturing More Productive — The authors argue the United States is a decade away from the scale of automated "lights-out" manufacturing needed to meet its own end-to-end demand at comparable cost. With 98% of US manufacturers being small or medium enterprises, low deployment of mature productivity technologies reflects limited commercial adoption and investment rather than technical readiness.

Tuesday, October 14, 2025

AI Summary. The analysis finds post-pandemic headline and core inflation closely tracking the pattern of the early 1970s, with the spike in each case taking about three years to be brought under control and followed by roughly 18 months of relative stability. If the parallel holds, a renewed inflation flare-up would be expected.

Jesper Rangvid Rangvid's Blog
Date Posted:

Updating his chart showing a striking correlation between the Covid inflation and that of the mid-1970s, albeit at a lower level, Rangvid suggests that current upside risks to inflation might leave us with a second peak resembling that of 1978–1982.

Does today's inflation path point to a renewed surge?

Core argument: In both the early-1970s and post-pandemic episodes, it took about three years from the onset of the inflation shock for price growth to be brought more or less under control, according to the analysis.

The starting point of this analysis is the striking correlation between the inflation surge of the early 1970s and the post-pandemic episode. The unsettling part is that we now find ourselves at almost exactly the same stage as when prices began to rise again in the late 1970s. If inflation continues to follow the path of inflation in the 1970s, as the post-pandemic inflation experience has done until now, a renewed inflation flare-up is to be expected. Figure 3 shows that the correlation between the early-1970s and early-2020s patterns of core inflation is equally strong as for headline inflation. We can now conclude that the inflation spike lasted for roughly the same duration in both periods. In each case, it took about three years from the onset of the inflation shock for price growth to be brought more or less under control. This was followed by a year and a half of relative stability — albeit with a brief uptick in early 1977 — before inflation flattened again. In the 1970s that calm persisted until early 1978, when inflation began to surge once more. The interesting point here is that we are now at the same stage in the inflation process as when prices reignited in the late 1970s

Takeaways by Macro Roundup® AI

  1. In both the early-1970s and post-pandemic episodes, it took about three years from the onset of the inflation shock for price growth to be brought more or less under control, according to the analysis.
  2. The analysis finds the correlation between early-1970s and early-2020s core inflation patterns is as strong as for headline inflation, with both spikes lasting roughly the same duration.
  3. The analysis places the present stage of the inflation process at the same point as the late 1970s, when, after about a year and a half of relative stability, inflation began to surge again in early 1978, implying a renewed flare-up if the pattern holds.

Related Articles:

  • Mid-Year Outlook: At the Crossroads of Stagflation—What’s Next? — Foreign investors hold roughly $18.5tn in US equities (about 20% of the market), $7tn in Treasuries and $5tn in credit (about 30% of each), and foreign participation in 30-year Treasury auctions has trended down in recent months. Combined with US fiscal challenges, the authors argue this reliance on foreign demand is a vulnerability.
  • A Big, Not-So-Beautiful Inflation Picture — Wage growth for the lowest-paid quartile of US workers has slowed to just above the headline inflation rate, consistent with the view that companies are holding onto staff while showing little interest in bidding up pay for lower-skilled workers. With inflation not tamed and tariffs yet to feed through to employment and production decisions, the risk ahead is stagflation.
  • Inflation is Persistent and Consumers are Flush. Falling Rates Could be Dangerous — U.S. household and nonprofit net worth equals roughly 8.5 years of personal consumption spending, down from a peak of 9 years but above the 7.7-year average of 2018-2019. The author argues that cutting interest rates with inflation persistent risks unleashing this untapped financial firepower as additional consumer spending that would largely show up in higher prices rather than higher output.

AI Summary. Global current account imbalances are projected to widen before narrowing, with trade ahead of prospective tariffs temporarily widening the US deficit and China's surplus. Narrowing is expected to work through trade policy shifts, a weaker US dollar that aids export competitiveness, and fiscal expansion in China and Germany that reduces their surpluses.

IMF Staff International Monetary Fund
Date Posted:
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According to an IMF analysis, global imbalances grew in 2025 but are poised to narrow as the unwinding of pull-forward behavior associated with the implementation of tariffs dissipates.

How will global current account imbalances widen and then narrow?

Core argument: Global current account imbalances in 2025 are expected to exceed those projected in October 2024 before narrowing thereafter, as preemptive trade ahead of prospective tariffs widens the US deficit and China's surplus until pull-forward behavior dissipates.

Global current account imbalances in 2025 are expected to exceed those [of October 2024] and to narrow thereafter. Among the three largest contributors to the overall balance (China, Germany, United States), preemptive trade ahead of prospective tariffs widens the US deficit and the surplus for China, before unwinding as pull-forward behavior dissipates. The narrowing of global imbalances works through three main channels. The first is trade policy shifts. Overall, the impact on the current account of this channel is likely to be limited. Second, exchange rate movements are an additional channel of external adjustment. Higher unilateral tariffs would normally be associated with a stronger currency for the tariffing country, helping with the absorption of the tariff shock. The recent depreciation of the US dollar, instead, enhances export price competitiveness and restrains import-intensive consumption—possibly helping to narrow US external deficits. Last but not least, fiscal changes have accompanied trade developments. China and Germany have recently announced and expanded spending measures to boost domestic demand, which will lower net savings and reduce external surpluses. In the United States, the OBBBA is expected to widen the fiscal deficit over the medium term relative to projections. This weighs on public saving and so tends to widen the current account deficit—or at least temper any narrowing from other channels.

Takeaways by Macro Roundup® AI

  1. Global current account imbalances in 2025 are expected to exceed those projected in October 2024 before narrowing thereafter, as preemptive trade ahead of prospective tariffs widens the US deficit and China's surplus until pull-forward behavior dissipates.
  2. The narrowing of global imbalances works through three channels: trade policy shifts, whose current account impact is likely to be limited, exchange rate movements, and fiscal changes.
  3. Spending measures announced and expanded by China and Germany to boost domestic demand will lower net savings and reduce external surpluses, while the US OBBBA is expected to widen the fiscal deficit over the medium term, weighing on public saving.

Related Articles:

  • Global Imbalances In A Shifting World — Current accounts of major economies diverged, with the US deficit widening by $228bn to $1.13tn (1% of world GDP) while China's surplus rose by $161bn to $424bn and the euro area's by $198bn to $461bn. Changes in investment rates drove the widening saving-investment gaps, with private saving offsetting only 10–50% of the investment change.
  • Better Late Than Never: The IMF Starts to Recognize Balance of Payments Reality — The International Monetary Fund's latest report recognizes that global current account imbalances began widening, but its forecast that the surpluses of China, Japan, and Korea will fall is questioned. China's customs goods surplus rose $150bn in the first half of the year, pointing to a current account surplus above $600bn versus the Fund's $365bn projection.
  • The US Trade Deficit and Foreign Borrowing — The authors argue US trade deficits persist because foreign investors find US financial assets attractive, but the current deficit level is not sustainable. They estimate that stabilizing the US net foreign liability position requires improving the trade balance by about 2% of GDP, or over 3% if low-cost borrowing privileges are lost.

AI Summary. China's overall exports have remained stable under US tariffs because a sharp drop in shipments to the US has been offset by higher exports elsewhere, likely reflecting both trade diversion to new markets and transshipment through third countries. Either way, the author argues Chinese exporters' margins are squeezed, through lower prices or higher transport costs.

Robin Brooks Robin Brooks Substack
Date Posted:
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Robin Brooks argues China’s record good surplus overstates the strength of its export sector. Brooks suggests that the effect of tariffs has been to suppress Chinese margins, as exporters cut prices to sell to the non-US market.

Do tariffs squeeze Chinese exporters' margins even as total exports hold steady?

Core argument: China's overall exports have remained stable because a sharp drop in exports to the US has been offset by a rise in exports to all other destinations.

The charts illustrate the key stylized facts about China’s exports in the face of US tariffs. Overall exports have remained stable (left chart), but that’s because a sharp drop in exports to the US (right chart, red line) has been offset by a rise in exports to everywhere else (right chart, blue line). There’s two possible explanations for the rise in exports to non-US countries: (i) trade diversion, whereby China exports goods that otherwise would have gone to the US to new markets; and (ii) transshipment, whereby goods are shipped to the US via third countries. Both things are likely happening, but the former probably dominates to a substantial degree. The bottom line is that US tariffs are an adverse hit to the profitability of China’s exporters, who have to accept lower prices to offload goods that otherwise would have gone to the US. If instead goods are being transshipped to the US in substantial numbers, that means higher transportation costs, which also adversely hits margins of Chinese exporters.

Takeaways by Macro Roundup® AI

  1. China's overall exports have remained stable because a sharp drop in exports to the US has been offset by a rise in exports to all other destinations.
  2. The rise in China's non-US exports likely reflects both trade diversion, redirecting US-bound goods to new markets, and transshipment through third countries, with trade diversion probably dominating to a substantial degree.
  3. US tariffs hit the profitability of Chinese exporters, who accept lower prices to offload goods that would have gone to the US, while transshipment would raise transportation costs and also compress margins.

Related Articles:

  • China Emerges From Trade Chaos With Record Exports, Surplus — China posted a record half-year trade surplus of about $586bn, with exports up 5.8% year-over-year to $325bn and imports up 1.1%. Shipments to the US fell 16.1% from a year earlier, while exports to the 10 Southeast Asian nations in the Asean group rose 17%.
  • China’s “Anti-Involution” Campaign: Global Implications — China's economy has slowed as domestic investment stagnates and consumer spending stays weak, with the shortfall partly offset by rising net exports. The author argues these internal problems are being passed to the rest of the world, since export values are rising about 6% a year while import values are down 2.2%.
  • Trade With China Is Becoming a One-Way Street — China's import volumes have shown no growth since the end of 2022 while its export volumes rose 33%, according to data from the Netherlands Bureau of Economic Policy Analysis. In dollar terms, Chinese imports fell 11% from the US, 17% from Japan, and 18% from Germany, as Chinese companies replace overseas suppliers with domestic ones.

AI Summary. Global battery storage capacity is projected to rise 67% to 617GWh and grow tenfold by 2035, with the US and China accounting for about 70% of projects by power capacity. In California, batteries have supplied more than a quarter of electricity during spring and summer peaks, while gas generation fell 37% over two years.

Nassos Stylianou, Sam Learner, Irene de la Torre Arenas and Sam Joiner Financial Times
Date Posted:

California now has 13GW of battery storage capacity and plans to add another 8.6GW by 2027; the batteries consistently supplied 25% of the state’s electricity during the spring and summer peaks.

Are large-scale batteries reshaping how electricity is supplied at peak demand?

Core argument: BNEF expects global battery storage capacity to rise 67% to 617GWh this year and to grow tenfold by 2035, with the US and China accounting for about 70% of projects by power capacity.

California has become ground zero for the battery storage revolution, but the example is being followed all over the world. Global capacity is expected to rise by 67% to 617GWh this year and to grow tenfold by 2035, according to energy research firm BNEF. The US and China dominate the market, accounting for about 70% of projects by power capacity. In California, batteries consistently supplied more than a quarter of electricity during this year’s spring and summer peaks, data from energy analytics platform Grid Status shows. In the first eight months of 2025, gas generation was down 37% from 2023, according to Mark Jacobson of Stanford University.

Takeaways by Macro Roundup® AI

  1. BNEF expects global battery storage capacity to rise 67% to 617GWh this year and to grow tenfold by 2035, with the US and China accounting for about 70% of projects by power capacity.
  2. Batteries consistently supplied more than a quarter of California's electricity during this year's spring and summer peaks, according to data from energy analytics platform Grid Status.
  3. California gas generation in the first eight months of 2025 was down 37% from 2023, according to Mark Jacobson of Stanford University.

Related Articles:

  • Heliocentrism — An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
  • What’s Happening to Wholesale Electricity Prices? — Average US retail electricity prices have risen about 35% since 2020, while average wholesale electricity costs have nearly doubled, with wholesale prices far more volatile. Wholesale location marginal prices consist of energy generation costs (typically 80–90% of the total), transmission congestion, and transmission losses, with a price spike partly driven by a large rise in natural gas prices.
  • U.S. Developers Report Half Of New Electric Generating Capacity Will Come From Solar — U.S. developers plan to bring 64 GW of new electric generating capacity online in a single year, with utility-scale solar accounting for more than half and battery storage, wind, and natural gas making up virtually all the rest. That would exceed the prior record of 58 GW, of which 57 GW was natural gas.

AI Summary. A study of earnings among non-Hispanic White and three generations of Black workers finds that while the overall Black-White earnings gap widened, first- and second-generation Black immigrants made earnings advances, with second-generation Black women earning at or above White women. The authors attribute second-generation gains largely to educational attainment, with residential patterns playing a protective role.

Rong Fu, Neeraj Kaushal, and Felix Muchomba National Bureau of Economic Research
Date Posted:
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Over 2019–2024, 2nd-generation immigrant black female workers had earnings as high, or higher, than (non-hispanic) white women; 2nd-generation black male workers earned 10% < these white workers at the median, but this gap disappears at the top decile.

How does immigration reshape the Black-White earnings gap across generations?

Core argument: Among 2nd-generation Black workers in 2019–2024, women had earnings equal to or higher than White women, while men earned 10% less than White men at the median, a gap that disappeared at the top decile.

Our investigation of the earnings gap between non-Hispanic White and three generations of Black workers, during 1995-2024, a period during which the share of 1st- and 2nd-generation immigrants in the Black workforce quadrupled, reveals patterns previously obscured in research that treated the Black population as a monolithic race. In contrast to the well-documented widening in the overall Black White earnings gap, our findings demonstrate remarkable earnings advances among 1st- and 2nd-generation Black immigrants. [In the most recent period, 2019-2024], among women, 2nd-generation Black workers have earnings equal to or higher than those of White women; among men, 2nd-generation Black workers earn 10% less than White workers at the median, but this gap disappears at the top decile. We find the earnings gap between 1st generation Black and White men shrinking at the median, and halving at the top decile, over the study period. Educational attainment largely drives 2nd-generation success, while residential patterns [compared to those of native blacks] play a protective role for the 1st and 2nd generations.

Takeaways by Macro Roundup® AI

  1. Among 2nd-generation Black workers in 2019–2024, women had earnings equal to or higher than White women, while men earned 10% less than White men at the median, a gap that disappeared at the top decile.
  2. The earnings gap between 1st-generation Black and White men shrank at the median and halved at the top decile over 1995–2024, a period in which the share of 1st- and 2nd-generation immigrants in the Black workforce quadrupled.
  3. The authors attribute 2nd-generation earnings success largely to educational attainment, and find residential patterns play a protective role for the 1st and 2nd generations relative to native-born Black workers.

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  • Changing Opportunity: Sociological Mechanisms Underlying Growing Class Gaps and Shrinking Race Gaps in Economic Mobility — Across the 1978 to 1992 birth cohorts, adult household incomes fell for white children raised in low-income families and rose for those raised in high-income families, increasing the intergenerational persistence of income ranks among white children by 28%. Over the same cohorts, adult incomes rose for Black children at all parental income levels.
  • The Long-Run Impacts of Banning Affirmative Action in US Higher Education — State-level bans on affirmative action in US higher education are estimated to reduce under-represented minority women's college degree completion, earnings, and employment relative to non-Hispanic White women, driven largely by effects on Hispanic women, widening racial and ethnic gaps among women. Effects on under-represented minority men are more ambiguous and vary across states.

AI Summary. The US Defense Logistics Agency has signaled plans to buy up to $500m of cobalt, $245m of antimony, $100m of tantalum and a combined $45m of scandium for its critical minerals stockpile, valued at $1.3bn. Stockpiled materials can be released only by the president in declared war or when deemed necessary for national defense.

Camilla Hodgson, Steff Chávez and Aime Williams Financial Times
Date Posted:

The US’s Defense Logistics Agency has launched an effort to expand the US stockpile of critical minerals. The Pentagon is seeking another $1B for the effort above the $2B allocated earlier this year.

Is the Pentagon expanding its critical minerals stockpile?

Core argument: The Defense Logistics Agency has issued expressions of interest to buy up to $500mn of cobalt, up to $245mn of antimony from US Antimony Corporation, up to $100mn of tantalum from an undisclosed US company, and up to a combined $45mn of scandium from Rio Tinto and APL Engineered Materials.

Recent expressions of interest from the DLA include plans to buy up to $500mn of cobalt, up to $245mn of antimony from the domestic US Antimony Corporation, up to $100mn of tantalum from an undisclosed US company and up to a combined $45mn of scandium from Rio Tinto and APL Engineered Materials, a chemical manufacturing company based in Illinois that has offices in Japan and China. The DLA stockpiles dozens of alloys, metals, rare earths, ores and precious metals, which are stored in depots throughout the country. Its assets were valued at $1.3bn as of 2023. The materials can only be released by the president in times of declared war, or if deemed necessary for national defence by the under-secretary of defence for acquisition and sustainment.

Takeaways by Macro Roundup® AI

  1. The Defense Logistics Agency has issued expressions of interest to buy up to $500mn of cobalt, up to $245mn of antimony from US Antimony Corporation, up to $100mn of tantalum from an undisclosed US company, and up to a combined $45mn of scandium from Rio Tinto and APL Engineered Materials.
  2. The Defense Logistics Agency's stockpile of alloys, metals, rare earths, ores and precious metals, stored in depots across the US, was valued at $1.3bn as of 2023.
  3. Stockpiled materials can be released only by the president in times of declared war, or when the under-secretary of defence for acquisition and sustainment deems release necessary for national defence.

Related Articles:

  • China Unveils Sweeping Rare-Earth Export Controls To Protect ‘National Security’ — China has imposed export controls requiring its approval for foreign companies to export magnets containing as little as 0.1% Chinese-sourced rare earths or made using Chinese extraction, refining, or magnet-making technology. China controls roughly 70% of rare earth mining, 90% of separation and processing, and 93% of magnet manufacturing.
  • China Is Choking Supply of Critical Minerals to Western Defense Companies — China detained a US defense supplier's 55-metric-ton shipment of Australian-mined antimony for three months while it was transiting the Chinese port of Ningbo, releasing it only on the condition that it be returned to Australia rather than sent to the US. The episode signals that Beijing is enforcing its critical mineral export bans against Western defense companies.
  • China Cracks Down On Foreign Companies Stockpiling Rare Earths — China is warning foreign buyers of rare earths and derived products such as magnets that building large inventories will bring supply restrictions, and is limiting approved export volumes to prevent stockpiling, according to people familiar with the matter.