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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
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  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Monday, December 8, 2025

AI Summary. China's trade surplus reached $1.1tn in 11 months, exceeding its previous full-year record, as strong export growth to the European Union and Africa more than offset a 29% drop in shipments to the US. France's president has warned the EU may impose tariffs if Beijing does not address the imbalance.

Bloomberg Staff Bloomberg
Date Posted:

China’s exports rose 5.9% y/y in November, driving China’s 2025 goods trade surplus to a record $1.1T.

Is China's trade surplus hitting a record despite falling US shipments?

Core argument: China amassed a trade surplus of $1.1 trillion in 11 months, surpassing the full-year record set in 2024.

As China navigated the trade war and growing economic protectionism around the world, the country amassed a surplus of $1.1 trillion, needing just 11 months to catapult it past a full-year record set in 2024. While shipments to the US plummeted 29% in November — the eighth month of double-digit declines and the biggest since August — strong growth in sales to regions like the European Union and Africa more than offset the slump. The display of export dominance is stirring waves of resentment abroad. French President Emmanuel Macron, who visited China last week, has warned the EU may take “strong measures,” including by imposing tariffs, should Beijing fail to address the imbalance.

Takeaways by Macro Roundup® AI

  1. China amassed a trade surplus of $1.1 trillion in 11 months, surpassing the full-year record set in 2024.
  2. Chinese shipments to the US fell 29% in November, the eighth month of double-digit declines and the biggest since August, while growth in sales to regions including the European Union and Africa more than offset the slump.
  3. French President Emmanuel Macron has warned that the EU may take "strong measures," including tariffs, should Beijing fail to address the trade imbalance.

Related Articles:

  • China Is Making Trade Impossible — Interviews with Chinese economists, technologists and business leaders yielded no clear answer to what products China would want to buy from the rest of the world in future, beyond commodities, luxury goods and higher education. The author argues China sees nothing it cannot eventually make better and cheaper itself, undermining trade as a two-way exchange.
  • The Fracturing Of The World Economy — The US would gain relative to China from a fracturing world economy because its bloc of allies includes nearly all advanced countries, accounting for 68% of world GDP at market prices versus 26% for China's bloc. China's structural current account surplus also leaves it reliant on the US and its allies as safe places to invest those funds.
  • Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push — Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.

AI Summary. China accounts for 17% of global GDP, and Goldman Sachs projects its current-account surplus will reach 1% of world GDP by 2029, larger than any country's since at least the late 1940s. Goldman estimates the historically positive spillover has turned negative, with faster Chinese growth now trimming growth elsewhere as cheaper goods fail to offset damage to rival manufacturers.

Greg Ip Wall Street Journal
Date Posted:

GS estimates that for every 1pp increase in Chinese GDP, advanced economies now experience a 0.1–0.3pp drag. Greg Ip notes that China used to be a driver of global growth, but its exports are now a headwind to growth in advanced economies.

Does faster Chinese growth now reduce growth elsewhere?

Core argument: Goldman estimates China's current-account surplus will reach 1% of world GDP by 2029, larger than any country's at least since the late 1940s, with China now accounting for 17% of global GDP.

Two decades ago, China’s economy was small enough that its trade surplus mattered little to the world. Today China accounts for 17% of global gross domestic product. Goldman estimates its surplus on the current account—the broadest definition of trade—will reach 1% of world GDP by 2029, larger than any country at least since the late 1940s. In the past, they wrote, 1% more output in China would raise the rest of the world’s output by 0.2% as it pulled in imports. In their new forecast, the Goldman team has concluded that the relationship has turned negative. China’s growth, they write, is being driven by its “leadership’s determination and capability to further advance manufacturing competitiveness and boost exports.” This is positive for other countries insofar as cheaper Chinese goods boost purchasing power. But that benefit is more than offset by the hit to their manufacturing sectors from Chinese competition. The upshot is that Goldman sees China growing about 0.6 percentage point a year faster over the next few years, but that will reduce the rest of the world’s growth by 0.1 point a year.

Takeaways by Macro Roundup® AI

  1. Goldman estimates China's current-account surplus will reach 1% of world GDP by 2029, larger than any country's at least since the late 1940s, with China now accounting for 17% of global GDP.
  2. Goldman concludes the spillover from Chinese growth has turned negative: where 1% more Chinese output once raised the rest of the world's output by 0.2%, China's export-driven expansion now subtracts from it.
  3. Goldman forecasts China growing about 0.6 percentage point a year faster over the next few years while reducing the rest of the world's growth by 0.1 point a year, as the hit to foreign manufacturing more than offsets cheaper Chinese goods.

Related Articles:

  • Sticking with What Works: Raising GDP Forecast on China’s Manufacturing Push — Stronger Chinese growth driven by export-oriented manufacturing may not produce net positive spillovers: for every 1pp export-driven boost to China's GDP, other economies may see a 0.1–0.3pp drag, with high-tech producers such as Europe and Japan facing greater pressure. Cheaper Chinese goods continue to exert a disinflationary impulse.
  • We Warned About the First China Shock. The Next One Will Be Worse — The authors argue China is moving from follower to leader by aggressively contesting innovative sectors long dominated by the United States, including aviation, artificial intelligence, telecommunications, microprocessors, robotics, and nuclear and fusion power. They note the world's largest and most innovative makers of electric vehicles, EV batteries, drones, and solar wafers are all Chinese firms under 30 years old.
  • China’s Massive Surplus Is Everywhere (Yet The IMF Still Has Trouble Seeing It Clearly) — China's manufactured goods surplus exceeds $2tn in its own customs data, about 10.5% of Chinese GDP and over 2% of world GDP, far exceeding the combined peak surpluses of Germany and Japan. The author argues the International Monetary Fund understates this by relying solely on reported current account balances, which have not similarly jumped.

AI Summary. Even as the Federal Reserve has cut its benchmark rate by 1.5 percentage points to a 3.75%-4% range, long-term Treasury yields have risen, with 10-year yields up nearly half a point to 4.1% and 30-year yields up over 0.8 point. New York Federal Reserve estimates show the term premium up nearly a full percentage point.

Ye Xie and Michael MacKenzie Bloomberg
Date Posted:

Since the start of the Fed’s cutting cycle,10-year yields have risen ~50bps to 4.1% and the 30-year yield has risen 80bps. The ~1pp rise in the term premium highlights the inability of the central bank to control long-term rates.

Do long-term Treasury yields rise even as the Fed cuts rates?

Core argument: Ten-year Treasury yields have risen nearly 0.5 percentage point to 4.1% and 30-year yields over 0.8 percentage point since the Federal Reserve began easing in September 2024, even as the Fed cut its benchmark rate by 1.5 percentage points to 3.75%–4%.

The Fed started pulling its benchmark rate down from a more than two-decade high in September 2024 and has since cut it by 1.5 percentage points to a range of 3.75% to 4%. Traders see another quarter point cut after the next meeting on Wednesday as virtually assured and are pricing in two more such moves next year, which would bring its rate to around 3%. Yet, key Treasury yields — which serve as the main baseline for the borrowing costs paid by American consumers and corporations — haven’t come down at all. Ten-year yields have risen nearly half a percentage point to 4.1% since the Fed started easing policy and 30-year yields are up over 0.8 percentage point. The [term premium] has risen nearly a full percentage point since the rate-cut cycle began, according to the New York Fed estimates.

Takeaways by Macro Roundup® AI

  1. Ten-year Treasury yields have risen nearly 0.5 percentage point to 4.1% and 30-year yields over 0.8 percentage point since the Federal Reserve began easing in September 2024, even as the Fed cut its benchmark rate by 1.5 percentage points to 3.75%–4%.
  2. Traders treat a further quarter-point cut at the Federal Reserve's next meeting as virtually assured and are pricing in two more such moves next year, which would bring the Fed's rate to around 3%.
  3. The term premium has risen nearly a full percentage point since the rate-cut cycle began, according to New York Fed estimates, and Treasury yields serve as the main baseline for borrowing costs paid by American consumers and corporations.

Related Articles:

  • Political Pressure on the Fed — Using data on President–Federal Reserve interactions, the author estimates that political pressure to ease monetary policy raises the price level strongly and persistently without boosting real activity, working through inflation expectations more than a typical easing. Such pressure occurred mainly in the 1970s and contributed to inflationary episodes.
  • The Race Between Asset Supply and Asset Demand — The authors estimate that demand for assets has outpaced supply by roughly 400% of GDP versus 100%, making rising asset demand the leading contributor to falling interest rates. They project that debt sustainability requires fiscal consolidation exceeding 10% of GDP, though debt could reach 250% of GDP without raising interest rates.
  • 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.

AI Summary. U.S. households now hold roughly 40% of financial wealth in equities, up from about 32% in 2000, with equity holdings worth about 250% of annual consumption versus 160%. Applying a 3% marginal propensity to consume out of equity wealth, the author estimates a 50% stock-market fall would cut consumption 3.8% and GDP 2.6%.

Jesper Rangvid Rangvid's Blog
Date Posted:

Given US households’ higher stock market exposure today relative to 2000, a stock market correction on the scale of the dot-com crash would imply a reduction in consumption of 3.8% and GDP of 2.6%.

How much would a 50% stock-market decline reduce consumption and GDP?

Core argument: Applying a 3% marginal propensity to consume out of equity wealth to roughly USD 21 trillion of U.S. personal consumption implies a 50% equity-market decline would cut aggregate consumption by about 3.8% and GDP, at roughly USD 30.5 trillion, by about 2.6%.

In early 2000, U.S. households held around USD 11 trillion in equities and USD 34 trillion in total financial wealth, giving an equity share of roughly 32%. When the stock market fell by 50% after the dot-com crash, households therefore lost about USD 5.5 trillion. Applying [a] 3% marginal propensity to consume out of equity implies a fall in consumption of roughly USD 165 billion. Total consumption at the time was about USD 6.8 trillion, so the percentage decline in consumption was around 2.4%. In 2000, U.S. households had allocated around 32% of their financial wealth to equities. Today, that share is a quarter higher, at roughly 40%. In 2000, the value of [US households’ equity] holdings amounted to about 160% of annual consumption. Today, the ratio is closer to 250%. Total personal consumption expenditure in the U.S. is around USD 21 trillion. The percentage decline in aggregate consumption thus amounts to 3.8% for a 50% stock-market fall. U.S. GDP is roughly USD 30.5 trillion; consumption accounts for about two-thirds of it. This implies that GDP would decline by 2.6% if the market falls 50%. Since 2000, annual real GDP growth has averaged around 2.2%, and consumption growth about 2.5%. If these figures represent “normal” growth, a 20% equity-market decline would not on its own trigger a recession. A 50% decline, by contrast, likely would.

Takeaways by Macro Roundup® AI

  1. Applying a 3% marginal propensity to consume out of equity wealth to roughly USD 21 trillion of U.S. personal consumption implies a 50% equity-market decline would cut aggregate consumption by about 3.8% and GDP, at roughly USD 30.5 trillion, by about 2.6%.
  2. U.S. households hold roughly 40% of financial wealth in equities, a quarter higher than the roughly 32% share in early 2000, with equity holdings equal to about 250% of annual consumption versus about 160% then.
  3. With U.S. real GDP growth averaging about 2.2% and consumption growth about 2.5% since 2000, a 20% equity-market decline would not on its own trigger a recession, while a 50% decline likely would.

Related Articles:

  • AI Bubble Burst: How Severe A Recession Will It Trigger? Part I — The cyclically adjusted price-earnings ratio stands at 40, below its all-time high of 44.2 but above the level reached at the onset of the Great Depression. Using only the prior year's earnings gives a less extreme reading, yet the standard price-earnings ratio still sits near the 95th percentile of its historical distribution.
  • Why We Are Not In A Bubble….Yet — The 5 largest US technology companies are worth about 16% of the global public equity market, and the top 10 US stocks nearly 25%, almost $25tn. The author argues valuations are high but not bubble-level, with the "Magnificent 7" median forward price-to-earnings ratio at 27x, roughly half that of the late-1990s leaders.
  • Surviving the AI Capex Boom — Capital spending by the largest US technology companies has risen from 4% to 15% of revenue since 2012, approaching the capital intensity of utilities, with Meta, Microsoft, and Alphabet each set to spend 21–35% of revenue. The authors argue this shift toward asset-heavy models is associated with inferior returns.

AI Summary. The share of middle-class disposable income spent on essentials — healthcare, childcare, housing and food — has climbed from just over a third to half. Total household spending as a share of income remains broadly in line with its historical average, offset by falling prices for clothes, electronics, appliances and other mass-produced goods.

John Burn-Murdoch Financial Times
Date Posted:

Since 1985, the share of income the US middle class spends on “essentials” has risen from 1/3 to 1/2. Burn-Murdoch notes, “the squeeze and the prosperity are two sides of the same coin” as the relative price of labour-intensive services rises over time.

Why do households feel poorer when overall spending shares are unchanged?

Core argument: Spending on unavoidable essentials has risen from just over a third of middle-class disposable income to half, with healthcare up 3 percentage points, housing up 4, childcare up 2, and food up 1.

The share of income the middle class spends on essential categories has risen significantly over both the long and shorter term. Add together the increased portion of incomes accounted for by healthcare (up by 3pp over recent decades), childcare (up 2pp), housing (up 4 pp) and food (up 1pp in recent years), and total spending on these unavoidable costs has climbed from just over a third of middle class disposable income to half of the total. But this squeeze from essentials has not led to an increase in the share of income American households spend in total across all categories, which is broadly in line with the historical average — even slightly down on where it was when all of these things were cheaper in real terms. This has been made possible primarily by dramatic falls in the price of clothes, electronics, household appliances and other mass-produced tradeable goods, which have more than offset the rise in essential services. Even if people keep consuming the exact same basket of goods and services, as living standards in their country increase they will find more and more of their spending is going on essential services.

Takeaways by Macro Roundup® AI

  1. Spending on unavoidable essentials has risen from just over a third of middle-class disposable income to half, with healthcare up 3 percentage points, housing up 4, childcare up 2, and food up 1.
  2. Total US household spending across all categories as a share of income remains broadly in line with the historical average, and slightly below its level when essentials were cheaper in real terms.
  3. Falling prices for clothes, electronics, household appliances and other mass-produced tradeable goods have more than offset the rising cost of essential services.

Related Articles:

  • Our Economy Is Not Stagnant — A national survey found 56% of Americans believe life in America today is worse than 50 years ago, but income data conflict with this perception of long-run decline. The typical year-round male worker earned $74,000 in 2023 including benefits and employer taxes, 46% above 1973, while the typical woman's earnings rose 121%.
  • Don’t Choose Your Own Adventure: Understanding Middle-Class Earnings Trends — Using a standard price index, US men's earnings were flat from 1973 to 1989 and rose 0.4% a year thereafter, while an alternative middle-class cost-of-living index shows 0.7% annual growth in both periods and a 40% total rise instead of 13%. The author attributes weak growth to 1970s stagflation and early-1980s recessions rather than trade, immigration, or income concentration.
  • The American Dream Is Not a Coin Flip, and Wages Have Not Stagnated — Using an alternative cost-of-living adjustment, the typical 40-year-old's pre-tax family income rose 52% between 1979 and 2019, or 73% adjusting for family size, versus 15% under the methods behind widely cited mobility estimates. Absolute mobility is down 20 percentage points since 1979 but stood at 72% in 2023.

AI Summary. Home ownership functions as the modern marker of full participation in American society, and while most people's incomes have risen faster than the cost of a broad basket of consumer goods, housing has become substantially less affordable over the past generation. The author argues encouraging more housing construction is the most important element of a long-run affordability agenda.

Paul Krugman Paul Krugman Substack
Date Posted:

Krugman highlights two concrete facts that help explain the social frustration reflected in discussions of “affordability:” the income of the young hasn’t kept pace with the price of starter homes, and the job-finding rate has fallen in the last year.

Is home ownership the key to affordability in America?

Core argument: Most Americans have seen real incomes rise as wages and other incomes outpaced the cost of a broad basket of consumer goods, while houses have become substantially less affordable over the past generation.

In today’s America, a key component in our general sense of affordability is the ability to acquire the modern equivalent of an 18th century linen shirt - something that both publicly and privately allows you to be a full participant in society. So what is our modern equivalent of a linen shirt? I would say home ownership. What makes the social importance of home ownership relevant to the affordability discussion is that while most people have seen their real incomes rise despite inflation - that is, wages and other incomes have risen faster than the cost of a broad basket of consumer goods - houses have become substantially less affordable over the past generation. Encouraging more housing construction is arguably the most important aspect of a long-run affordability agenda. Although the unemployment rate has risen since last year, it is still relatively low by historical standards. Yet the labor market is effectively “frozen”: employers aren’t firing a lot of people, but they aren’t hiring many people either.

Takeaways by Macro Roundup® AI

  1. Most Americans have seen real incomes rise as wages and other incomes outpaced the cost of a broad basket of consumer goods, while houses have become substantially less affordable over the past generation.
  2. Home ownership is the modern equivalent of the 18th century linen shirt, the good that allows full participation in society, and encouraging more housing construction is arguably the most important part of a long-run affordability agenda.
  3. The U.S. unemployment rate has risen since last year but remains relatively low by historical standards, while the labor market is effectively frozen, with employers neither firing nor hiring many workers.

Related Articles:

  • Affordability, Part I — Conventional data show wages have outpaced inflation for most workers, contradicting the narrative that prices have outrun incomes; the Consumer Price Index used to calculate real wages excludes borrowing costs. Many Americans rely on credit for homes and cars, and the ability of young Americans to buy first homes has deteriorated substantially.
  • The Middle Class Is Buckling Under Almost Five Years of Persistent Inflation — US prices for goods and services are 25% above 2020 levels, and 44% of middle-income respondents in the University of Michigan consumer sentiment survey said their finances were worse than a year earlier versus 23% who said better, with most citing higher prices. Retailers report middle-income customers pulling back on discretionary spending.
  • Jobless Growth — Labor demand growth may be too weak to keep pace with even modest labor supply growth: the labor market is somewhat weaker than before the pandemic, job growth has turned negative outside healthcare, and firms are focused on using AI to cut labor costs. Economists estimate most employment losses in routine manual occupations since the 1970s occurred during recessions.

Tuesday, December 9, 2025

AI Summary. The authors estimate that Brexit reduced UK GDP by 6% to 8%, investment by 12% to 18%, and employment and productivity each by 3% to 4%, with effects accumulating gradually. Survey data indicate these impacts reflect elevated uncertainty, reduced demand, diverted management time, and greater misallocation of resources.

Nicholas Bloom, Philip Bunn, Paul Mizen, Pawel Smietanka, et al. National Bureau of Economic Research
Date Posted:

Firm-level data from Bloom et al’s Decision Maker Survey Panel, as well as macrodata, suggest that the Brexit process reduced GDP by 6-8% and TFP by ~3-4% as of 2025. The effects were much larger for firms with higher pre-referendum exposure to the EU.

How much has leaving the EU reduced UK output?

Core argument: Estimates combining macro simulations with Decision Maker Panel micro data suggest that by 2025 Brexit had reduced UK GDP by 6–8%, investment by 12–18%, employment by 3–4% and the level of productivity by 3–4%, accumulating gradually over time.

We combine simulations based on macro data with estimates derived from micro data collected through our Decision Maker Panel survey. These estimates suggest that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time. We estimate that investment was reduced by between 12% and 18%, employment by 3% to 4% and [the level] of productivity by 3% to 4%. [The survey data indicate that] these large negative impacts reflect a combination of elevated uncertainty, reduced demand, diverted management time, and increased misallocation of resources from a protracted Brexit process. Firms with a higher level of pre-referendum exposure to the EU (based on our six-measure average) experienced higher investment growth than less exposed firms in the pre-referendum period between 2011 and 2015. But after 2016, investment growth was lower for these more exposed firms. [Likewise], firms with higher pre-referendum exposure to the EU had faster TFP growth prior to the referendum, but lower TFP growth afterwards - a firm with an EU exposure index of 0.1 (~ the mean), rather than 0, experienced [total factor] productivity growth of around 0.5 percentage points a year less after 2016 than it would have otherwise done.

Takeaways by Macro Roundup® AI

  1. Estimates combining macro simulations with Decision Maker Panel micro data suggest that by 2025 Brexit had reduced UK GDP by 6–8%, investment by 12–18%, employment by 3–4% and the level of productivity by 3–4%, accumulating gradually over time.
  2. Decision Maker Panel survey data indicate these negative impacts reflect elevated uncertainty, reduced demand, diverted management time and increased misallocation of resources from a protracted Brexit process.
  3. Firms with higher pre-referendum EU exposure had faster investment and total factor productivity growth in 2011–2015 but slower growth after 2016, with a firm at the mean exposure index of 0.1 estimated to see about 0.5 percentage points a year less TFP growth.

Related Articles:

  • Rule, Britannia! — UK small-cap companies previously earned higher profit margins and traded at higher price-to-book valuations than continental European peers, but the margin gap has almost entirely disappeared and UK stocks now trade at a discount. The analysis uses small-caps in both regions because such firms earn most of their income domestically.
  • The Force Shaping Western Politics — The foreign-born share of the population has risen sharply since 1990 in nearly every large Western country. As mainstream politicians from the center-right to the left dismissed voters' concerns about immigration, many voters drifted toward extreme-right parties that promised to reduce it.
  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.

AI Summary. European Union home affairs ministers agreed to allow failed asylum seekers to be sent to "return hubs" outside the bloc, alongside harsher rules for detaining and deporting migrants without the right to stay. The measures also make it easier to deny entry to people who can be sent to countries the EU deems "safe.

Laura Dubois Financial Times
Date Posted:

EU ministers have agreed on a plan to send failed asylum seekers to “hubs” outside the bloc. The Netherlands has already signed an agreement with Uganda to send rejected asylum seekers there.

Is Europe tightening migration policy with offshore return hubs?

Core argument: EU home affairs ministers agreed measures to send failed asylum seekers to "hubs" outside the bloc, echoing the crackdown on immigration in the United States.

EU ministers have agreed measures to send failed asylum seekers to “hubs” outside the bloc, as Brussels drastically tightens its migration policies, echoing the crackdown on immigration in the US. Home affairs ministers on Monday agreed harsher rules to detain and deport migrants who do not have a right to stay in the EU, and measures making it easier to deny entry to people who can be sent to countries outside the bloc the EU deems ‘‘safe.’’ “It’s a turning point in European migration and asylum policy altogether,” EU migration commissioner Magnus Brunner said on the sidelines of a meeting of home affairs ministers in Brussels.

Takeaways by Macro Roundup® AI

  1. EU home affairs ministers agreed measures to send failed asylum seekers to "hubs" outside the bloc, echoing the crackdown on immigration in the United States.
  2. The agreed rules impose harsher terms for detaining and deporting migrants without a right to stay in the EU and make it easier to deny entry to people who can be sent to non-EU countries the bloc deems "safe.".
  3. EU migration commissioner Magnus Brunner called the agreement "a turning point in European migration and asylum policy altogether.".

Related Articles:

  • Africa Needs 1 Billion Jobs by the End of the Century. Where Will It Find Them? — Africa's population, now about 1.5bn, is projected to reach 4bn by 2100, with sub-Saharan Africa approaching 3.5bn and Nigeria's working-age population forecast to exceed 320m. Between 2005 and 2020, Congo, Nigeria, Ethiopia and other large states averaged only one job created for every two entrants to the working-age population.
  • 21st-Century Africa Governance and Growth — Sub-Saharan Africa's GDP per capita has fallen relative to the world average over three decades, from 30% to 22%, reflecting the region's inability to sustain growth. Had it grown at the global pace since 1990, income per capita would be over 40% higher; at emerging East Asia's pace, nearly 3x higher.
  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.

AI Summary. The H200 chip is roughly 6x as powerful as the H20, which requires an export license for China and has been approved only in limited quantities. The authors estimate the US would hold a 21–49x advantage in AI compute produced in a coming year absent chip exports to China, shrinking to between 6.7x and 1.2x with unrestricted H200 exports.

Saif Khan, Tao Burga, Tim Fist and Georgia Adamson Institute for Progress
Date Posted:

In a break from current policy, Trump will allow NVIDIA’s H200 chips to be sold to China. Assuming some smuggling, the US would have had a 2026 compute advantage vis-a-vis China of 10–12x; H200 sales will decrease that to 1.2–6.7x.

Would exporting advanced AI chips to China shrink America's compute advantage?

Core argument: The authors estimate the US would hold a 21–49x advantage in AI compute produced in 2026 if there were no AI chip exports to China and no smuggling.

The H200 (Hopper) [is] almost 6x as powerful as the H20 — a chip that requires an export license to China and has been approved for export in only limited quantities. Exporting Hopper chips would significantly erode America’s expected AI compute advantage over China. With no AI chip exports to China and no smuggling, we estimate the US would hold a 21–49x advantage in 2026-produced AI compute. This advantage would translate into a much greater American capacity to train frontier models, support more and better-resourced AI and cloud companies, and run more powerful inference workloads for more capable AI models and agents. Unrestricted H200 exports would shrink this advantage to between 6.7x and 1.2x, depending on the scale of Chinese demand.

Takeaways by Macro Roundup® AI

  1. The authors estimate the US would hold a 21–49x advantage in AI compute produced in 2026 if there were no AI chip exports to China and no smuggling.
  2. Unrestricted exports of H200 Hopper chips would shrink the projected US compute advantage to between 6.7x and 1.2x, depending on the scale of Chinese demand.
  3. The H200 is almost 6x as powerful as the H20, a chip that requires an export license for China and has been approved for export only in limited quantities.

Related Articles:

  • America’s Chip Restrictions Are Biting in China — Shortages of advanced semiconductors in China are acute enough that authorities have begun intervening in how output from Semiconductor Manufacturing International, the country's largest contract chip maker, is distributed, prioritizing Huawei's artificial-intelligence chip production. Chinese firms also smuggle Nvidia chips or access them remotely through cloud computing abroad.
  • China Has Its Own Concerns About Nvidia H20 Chips — China's leaders cite security concerns, including suspicion of hidden back doors in US-designed chips, as a rationale for their drive toward chip self-sufficiency. The dilemma extends beyond chips: US intelligence reportedly found extra modems on Chinese-made port cranes, and the US has banned Chinese components from connected auto systems.
  • China Seeks To Triple Output Of AI Chips In Race With The US — China is preparing three new fabrication plants dedicated to producing Huawei's artificial intelligence processors, and people familiar with the effort say their combined capacity, once fully ramped up, could exceed current output from comparable lines at SMIC, China's leading chipmaker. Huawei denies having plans to launch its own fabrication plants.

AI Summary. Japan has reduced its reliance on Chinese rare earths, with industry estimates putting China's share of Japanese rare-earth imports at roughly 60% to 70%, down from 90% or more. Japan's alternative chain runs from an Australian open-pit mine through a separation plant in Malaysia to Japanese magnet makers supplying automakers.

River Akira Davis and Kiuko Notoya New York Times
Date Posted:

Following a 2010 trade dispute with China, Japan built a supply chain that reduced its dependence on Chinese rare earths from 90% to 60–70% today. The “toughest bottleneck” was refining, given the associated environmental issues.

How can a country reduce its dependence on Chinese rare earths?

Core argument: Japan's rare-earth imports from China stand closer to 60–70%, down from industry estimates of 90% or more during the 2010 trade dispute.

Japan has significantly bolstered its supply chain resilience. While industry estimates placed Japanese rare-earth imports from China at 90% or more during the 2010 trade dispute, that figure now stands closer to 60% to 70%. Today, in Western Australia, workers on the remote Mount Weld volcanic plug are flown out from Perth on rotations to extract rare-earth ore from an open-pit mine owned by Lynas [an Australian mining company]. The partially purified concentrate is then shipped 5,000 miles to the company’s facility in Kuantan, Malaysia — until this year, the only large-scale rare-earth separation plant operating outside China. There, the materials are refined through a chemical process into individual rare-earth oxides pure enough to use in manufacturing. From Malaysia, the metals are transported another 3,000 miles to Japan, where Sojitz [a Japanese conglomerate] manages distribution to domestic magnet makers. In Japan, the magnets are used in a number of products, including vehicles produced by automakers like Toyota.

Takeaways by Macro Roundup® AI

  1. Japan's rare-earth imports from China stand closer to 60–70%, down from industry estimates of 90% or more during the 2010 trade dispute.
  2. Lynas mines rare-earth ore at Mount Weld in Western Australia and ships partially purified concentrate 5,000 miles to Kuantan, Malaysia, which until this year housed the only large-scale rare-earth separation plant outside China.
  3. Refined rare-earth oxides travel another 3,000 miles from Malaysia to Japan, where Sojitz manages distribution to domestic magnet makers whose magnets go into products including Toyota vehicles.

Related Articles:

  • Mad Libs: Just Fill In The Blanks — China expanded its rare earth export controls to require licenses for any product containing more than 0.1% by value of Chinese rare earths or made with equipment containing them, with a presumption of denial for military uses and scrutiny of advanced semiconductor uses. Aggressive enforcement would affect industries from chips and autos to aerospace, defense and medical equipment.
  • Why China Keeps Winning The Trade War — Governments seeking supply-chain leverage face limited visibility into their own supply chains, and China's rare earth licensing requirements for multinationals may be partly intended to give Beijing that visibility and allow more precise targeting of future restrictions. Effective measures must impose asymmetric costs, and keeping foreign manufacturers dependent on drip-fed supply is central to Beijing's strategy.
  • China Hatches Plan to Keep U.S. Military From Getting Its Rare-Earth Magnets — China is designing a "validated end-user" system that would fast-track rare-earth and other restricted material export approvals for U.S. firms while excluding companies tied to the U.S. military. The arrangement would let China ease export flows while keeping the materials away from U.S. military suppliers.

AI Summary. Japan is installing missile batteries, radar towers, ammunition storage and other combat facilities across the 160-island Ryukyu chain, whose southern end lies about 110km east of Taiwan. It is also deploying F-35 fighter jets and long-range missiles on Kyushu and expanding its amphibious rapid deployment force.

Alastair Gale Bloomberg
Date Posted:

Japan is rapidly fortifying the Ryukyu island chain with major military assets such as F-35s, surface-to-air missiles and anti-ship missile batteries, including anti-ship missiles on Yonaguni, an island 68 miles east of Taiwan.

Is Japan turning its southern islands into a missile chain?

Core argument: Japan is installing missile batteries, radar towers, ammunition storage sites and other combat facilities across the 160-island Ryukyu chain, whose tail end, Yonaguni, lies 110 kilometers (68 miles) east of Taiwan.

Sitting just 110 kilometers (68 miles) east of Taiwan, Yonaguni marks the tail end of [the Ryukyu island chain], an archipelago stretching north to Japan’s main islands, a distance roughly equivalent to the length of the California coastline. Up and down the 160-strong island chain, Japan is quickly putting in place missile batteries, radar towers, ammunition storage sites and other combat facilities. It’s also beginning to deploy major military assets on Kyushu, the southernmost of Japan’s four main islands, including F-35 fighter jets and long-range missiles, as well as expanding its version of the US Marine Corps, known as the Amphibious Rapid Deployment Brigade.

Takeaways by Macro Roundup® AI

  1. Japan is installing missile batteries, radar towers, ammunition storage sites and other combat facilities across the 160-island Ryukyu chain, whose tail end, Yonaguni, lies 110 kilometers (68 miles) east of Taiwan.
  2. The Ryukyu archipelago stretches from Yonaguni north to Japan's main islands, a span roughly equivalent to the length of the California coastline.
  3. Japan is beginning to deploy F-35 fighter jets and long-range missiles on Kyushu, the southernmost of its four main islands, and expanding its Amphibious Rapid Deployment Brigade, its version of the US Marine Corps.

Related Articles:

  • Japan PM Takaichi Vows To Boost Defense Spending To 2% of GDP by March — Japan plans to raise defense-related spending to 2% of gross domestic product in the fiscal year ending March 2026, two years ahead of the existing target date of March 2028. The government also set economic goals it says require no tax increases and prioritized domestic energy sources including nuclear power and Japanese-developed perovskite solar cells.
  • Australia, Japan and US Sign ‘Historic’ Agreement on Naval Logistics — Australia, Japan, and the United States signed an agreement to boost logistical interoperability among their forces, letting their navies refuel, reload missile systems, repair ships, and share maintenance data, including flexible refueling at sea. Indo-Pacific militaries depend on sea and air transport for supplies, while fixed seaports and airports can be difficult to defend from attack.
  • U.S. Seeks To ‘Integrate’ Japan Into Defense Industrial Base — The U.S. and Japan are formalizing arrangements for U.S. Navy warships to undergo maintenance, repair, and overhaul at Japanese private shipyards, initially limited to the roughly two dozen ships forward-deployed to Japan. Expanding the work to U.S.-based ships, which could ease American maintenance bottlenecks, may require congressional action.