Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “…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 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
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…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 very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Tuesday, April 21, 2026

AI Summary. Employment among workers aged 22–24 in the most artificial-intelligence-exposed quintile of industry-state employers fell 15.2%, while other exposure quintiles were flat or posted modest gains. The decline is not generally observed among older workers; the 25-34 group's drop was less than one-third as large in percentage terms.

Lee Tucker U.S. Census Bureau
Date Posted:
Is Database:
Database

Using matched employer-employee data, Tucker finds a sharp 15.2% drop in employment of workers aged 22–24 (and a ~6% decline for workers aged 25–34) in the industry-state quintile most exposed to AI btw the rollout of ChatGPT in 2022q4 and 2025q2.

Is AI exposure reducing employment for the youngest workers?

Core argument: Employment of early career workers aged 22–24 in the most AI-exposed quintile of industry-state employers fell 15.2% from 2022q4 to 2025q2, while all other exposure quintiles were flat or posted modest gains.

Figure 3 provides a comparison of total employment among early career workers [those aged 22-24] across quintiles of industry-state AI exposure. It shows that early career employment in the most AI-exposed quintile of employers declined by 15.2% from the reference period of 2022q4 to 2025q2. All other quintiles either had flat employment or exhibited modest gains over the same period. This result is considerably larger than the 6% decline in employment among the most exposed workers as reported by Brynjolfsson, Chandar and Chen (2025). However, since I also find weaker employment growth among less-exposed quintiles, the unadjusted gap in employment growth is similar in magnitude. For example, although the result of Figure 3 is not regression adjusted, it is highly consistent with the 16% regression-adjusted relative decline in employment that Brynjolfsson et al. observe among the most exposed occupations in ages 22-24. Figure 4 [] compares most exposed quintile employment changes for early career workers against those of workers in four age bins of older workers. This figure demonstrates that the decline in employment of early career workers in AI-exposed industries is not generally observed among older workers. The 25-34 age group saw a substantial decline in employment over this period, but in percentage terms it was less than one third as large as that observed among ages 22-24.

Takeaways by Macro Roundup® AI

  1. Employment of early career workers aged 22–24 in the most AI-exposed quintile of industry-state employers fell 15.2% from 2022q4 to 2025q2, while all other exposure quintiles were flat or posted modest gains.
  2. The unadjusted 15.2% decline is consistent with the 16% regression-adjusted relative employment decline that Brynjolfsson, Chandar and Chen (2025) report among the most exposed occupations for ages 22–24.
  3. The employment decline in AI-exposed industries is not generally observed among older workers, and the 25–34 age group's percentage decline was less than one third as large as that for ages 22–24.

Related Articles:

  • AI and Jobs: The Final Word (Until the Next One) — Unemployment has risen by 0.30 percentage points for the fifth of workers most exposed to artificial intelligence, compared with 0.94 percentage points for the least exposed fifth, leaving no visible AI effect on jobs. The share of workers leaving the labor force within a year is lowest among the most AI-exposed workers and roughly flat.
  • 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.
  • Looking for the Ladder — The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.

AI Summary. US travel agency employment tripled to about 340,000 by 2000, then fell roughly 60% from that peak after airlines cut ticket commissions and online booking platforms emerged. Remaining agents shifted toward high-end clients, and the travel agent labor force shrank as workers changed careers, leaving a 2.8% unemployment rate.

Ernie Tedeschi Stripe Economics
Date Posted:

A structural decline in demand for travel agents due to online platforms manifested as sharp upticks in sector unemployment in 2001 and 2008. As agents exited, unemployment fell to new lows; overall employment has fallen by 60% from its 2000 peak.

How did travel agents adjust to online booking platforms?

Core argument: Airlines cutting agent commissions on ticket sales in the early 1990s and the emergence of Expedia, Travelocity, and Priceline preceded a structural decline in travel agency employment that accelerated after the 2001 recession.

Between 1980 and 2000, travel agent jobs tripled, peaking at about 340,000. But then a prolonged structural decline set in: airlines began cutting agent commissions on ticket sales in the early 1990s; and internet platforms like Expedia, Travelocity, and Priceline emerged. In the wake of the 2001 recession, employment in the travel agency industry fell precipitously. By the eve of the Great Recession in 2007, there were already nearly 40% fewer workers in travel agencies than at their dot-com peak. Four years later, employment was at less than half of its peak, and today travel agency jobs are 60% lower. The remaining human travel agents pivoted sharply upmarket, offering high end clients services no algorithm could replicate - a shift that is reflected in wages. While travel agent employment has declined steadily, so has the travel agent labor force, indicating that many agents have changed careers since 2000. As a result, the unemployment rate of travel agents was just 2.8% in 2025, lower than typical even before the dot-com boom, though travel agent unemployment has become far more sensitive to economic downturns.

Takeaways by Macro Roundup® AI

  1. Airlines cutting agent commissions on ticket sales in the early 1990s and the emergence of Expedia, Travelocity, and Priceline preceded a structural decline in travel agency employment that accelerated after the 2001 recession.
  2. Travel agent unemployment was 2.8% in 2025, lower than typical even before the dot-com boom, as the travel agent labor force shrank alongside employment and remaining agents moved upmarket, a shift reflected in wages.

Related Articles:

  • Looking for the Ladder — The article argues that the hiring downturn in occupations most exposed to generative AI reflects interest-rate sensitivity rather than AI itself, since roughly 38% of workers in the most AI-exposed quintile work in information, finance and insurance, and professional and technical services, versus under 2% in the least-exposed quintile.
  • AI and the Fable of the ATMs — Bank tellers per branch fell steadily as automated teller machines spread, and total teller employment held up only because banking deregulation drove a rise in branch numbers; teller jobs are down nearly 40% from their peak. The author argues invoking this case for AI requires identifying an equivalent offsetting source of labor demand.
  • AI and Young-adult Jobs: The Real Mystery — Employment rates have declined for young adults both with and without college degrees, with non-degree holders faring marginally worse, and employment growth for young workers of all education levels has lagged that of other workers. Artificial intelligence can replace some lower-skilled jobs, but those jobs are too few to drive youth labor market weakness.

AI Summary. Chinese industries with the largest declines in fixed asset investment are also those with the largest increases in factory-gate producer prices, which the authors read as evidence that China's "anti-involution" campaign is curbing excess capacity and reflating manufacturing prices. If durable, this reflation would affect global prices through Chinese export prices.

Martin Lynge Rasmussen Money: Inside and Out
Date Posted:

Pointing at stable Chinese industrial production while fixed asset investment has declined, Martin Lynge Rasmussen argues that Xi’s anti-involution campaign launched in July 2025 may be driving reflation in the industrial sector.

Is China's campaign against excess capacity reflating manufacturing prices?

Core argument: Industry-level Chinese data show an R² of 0.43 between 2025 declines in fixed asset investment and Jan–Feb 2026 increases in producer prices, with a few outliers, according to the authors' analysis.

To gain confidence in the idea that the anti-involution campaign has contributed to a) the decline in fixed asset investment and, thereby, b) the increase in manufacturing PPI, we examined the correlation between industry-level investment trends in 2025 and PPI in Jan-Feb 2026. Except for a few outliers, there is a respectable relationship (R2 = 0.43) between investment and PPI: the industries that saw the largest declines in investment in 2025 are also those that have seen the largest increases in PPI in Jan-Feb 2026. This makes us rather confident in the hypothesized mechanism: the anti-involution campaign -> decline in fixed asset investment -> decline in excess capacity -> increase in manufacturing PPI. If durable, China’s reflation will have global repercussions, most directly via export prices, even if the precise impact is difficult to quantify. This contrasts with the common view outside China that US tariffs will lead to excess supply being dumped into other markets, putting downward pressure on global prices.

Takeaways by Macro Roundup® AI

  1. Industry-level Chinese data show an R² of 0.43 between 2025 declines in fixed asset investment and Jan–Feb 2026 increases in producer prices, with a few outliers, according to the authors' analysis.
  2. The authors argue the correlation supports a mechanism running from China's anti-involution campaign to lower fixed asset investment, reduced excess capacity, and higher manufacturing PPI.
  3. If durable, China's reflation would carry global repercussions, most directly via export prices though difficult to quantify, contrasting with the common view outside China that US tariffs will push excess supply into other markets and depress global prices.

Related Articles:

  • China Shock 2.0: The Flood Of High-Tech Goods That Will Change The World — China's record goods trade surplus surpassed $1tn, driven by fierce domestic competition among manufacturers that investors describe as malignant but that yields high-quality products at prices rivals struggle to match. European leaders have called the surge of high-tech Chinese goods an existential threat to their continent's manufacturing.
  • 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.
  • China’s Economy: Rightsizing 2025, Looking Ahead to 2026 — The authors argue China's official growth figures are inconsistent with ten consecutive quarters of deflation, estimating that real GDP is around 11% below official levels, with most of the adjustment in investment. That would imply a drop of roughly 9 percentage points in China's share of global investment, helping explain its export surge.

AI Summary. China's National Bureau of Statistics reported the jobless rate for 16-to-24-year-olds, excluding students, rose to 16.9% from 16.1%, while the rate for those aged 25 to 29 rose to 7.7% from 7.2%, and overall urban unemployment edged up to 5.4%. A record 12.7m students, about 4% more than the prior year, are expected to graduate.

Sylvia Ma South China Morning Post
Date Posted:

China’s youth unemployment (16–24) rose ~80pp to 16.9% in March as 12.7mm new graduates prepare to enter the labor force. The measure’s recent peaks were in August 2024 and August 2025 at just under ~19%.

Is China's youth unemployment rising as record graduate numbers enter the workforce?

Core argument: China's jobless rate for 16-to-24-year-olds excluding students rose to 16.9% in March from 16.1% in February, according to National Bureau of Statistics data.

The jobless rate for the 16-to-24 age group, excluding students, edged up to 16.9% in March from 16.1% in February, according to data released by the National Bureau of Statistics. And with a record 12.7 million students expected to graduate this summer – around 4% more than last year – market conditions are expected to tighten further in the coming months. The unemployment rate for those aged 25 to 29, also excluding students, stood at 7.7% in March, up from 7.2% in February and the highest figure for the age group since the metric’s introduction in December 2023. China’s overall urban-unemployment rate inched up to 5.4% in March, from 5.3% in February, official data showed.

Takeaways by Macro Roundup® AI

  1. China's jobless rate for 16-to-24-year-olds excluding students rose to 16.9% in March from 16.1% in February, according to National Bureau of Statistics data.
  2. Unemployment among Chinese 25-to-29-year-olds excluding students climbed to 7.7% in March from 7.2% in February, the highest for the age group since the metric's introduction in December 2023.
  3. A record 12.7 million Chinese students are expected to graduate this summer, around 4% more than last year, with market conditions expected to tighten further.

Related Articles:

  • 2025 Letter — China's economy features intense market competition, with firms continually expanding into each other's core businesses, a dynamic the author argues involves greater capitalist competition and greater capitalist excess than in the United States. The author attributes China's sideways-trending stock market in part to profits being competed away.
  • Macro Outlook 2026: Sturdy Growth, Stagnant Jobs, Stable Prices — China's growth is forecast at 4.8%, above the 4.5% consensus, with robust manufacturing offset by a housing drag on output estimated at about 1.5 percentage points as property sales run 60% below peak. Strong manufacturing and weak domestic demand are projected to lift China's current account surplus toward 1% of global output.
  • The True Cost of China’s Falling Prices — Prices fell for 51 of 67 consumer items tracked over a two-year period in China, while the broader GDP deflator, which includes upstream sectors, declined for 10 straight quarters, indicating deflation is more entrenched in industry. The share of "zombie" firms whose profits cannot cover debt interest rose from 19% to 34% over five years.

AI Summary. Japan removed most restrictions on weapons exports, allowing overseas arms sales for the first time since World War II in a move aimed at strengthening its defense industrial base. Previously, exports were limited to equipment for rescue, transport, warning, surveillance and minesweeping.

Alastair Gale Bloomberg
Date Posted:

Japan is scrapping export controls that restricted overseas arms sales. The change came just days after a new contract was signed between the Australian Navy and Mitsubishi Heavy for 11 frigates.

Is Japan lifting most weapons export restrictions to strengthen its defense industry?

Core argument: Japan removed most restrictions on weapons exports, allowing arms sales overseas for the first time since World War II, in a move aimed at strengthening its defense industrial base.

Japan removed most of its restrictions on weapons exports, allowing the nation to sell arms overseas for the first time since World War II in a move aimed at strengthening its defense industrial base. The cabinet of Prime Minister Sanae Takaichi approved changes to defense export rules that will create a larger market for companies in the arms business. Previously, businesses could only export military equipment for use in operations related to rescue, transport, warning, surveillance and minesweeping. Unlike large defense-focused contractors in countries such as the UK and the US, Japan’s defense sector consists of a handful of manufacturing and technology conglomerates primarily focused on other businesses. For most, defense has long accounted for less than 20% of companywide revenue.

Takeaways by Macro Roundup® AI

  1. Japan removed most restrictions on weapons exports, allowing arms sales overseas for the first time since World War II, in a move aimed at strengthening its defense industrial base.
  2. Prime Minister Sanae Takaichi's cabinet approved defense export rule changes that will create a larger market for Japanese arms companies, which previously could only export equipment for rescue, transport, warning, surveillance and minesweeping operations.
  3. Japan's defense sector consists of a handful of manufacturing and technology conglomerates focused primarily on other businesses, with defense accounting for less than 20% of companywide revenue for most, unlike large defense-focused contractors in the UK and US.

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.
  • Japan Builds Up ‘Missile Archipelago’ Near Taiwan to Counter China — 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.
  • 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.

Wednesday, April 22, 2026

AI Summary. The authors estimate that the rate at which employed U.S. workers receive better-paying outside job offers fell by 51% between 1982–1991 and 2012–2021, a decline that is broad-based across demographic groups and especially pronounced among younger workers. They attribute part of the weakness in real wage growth since the early 1980s to this weakening job ladder.

Niklas Engbom, Aniket Baksy, and Daniele Caratelli National Bureau of Economic Research
Date Posted:
Is Database:
Database

The arrival rate for outside offers of better-paying employment fell 51% btw 1982–1991 and 2012–2021. The decade-by-decade narrowing of the distance between initial offers and the equilibrium wage distribution suggests declining advancement opportunities.

How much of the U.S. wage slowdown reflects fewer outside job offers?

Core argument: Using CPS microdata from 1982–2023 and a canonical job-ladder model, the authors estimate that the arrival rate of better-paying outside offers to employed U.S. workers fell by 51% between 1982–1991 and 2012–2021.

Real wage growth in the United States has been markedly weaker since the early 1980s relative to the earlier postwar period. This paper quantifies the contribution of changes in labor-market structure—manifested as a weakening of the U.S. job ladder—to this wage stagnation. Using CPS microdata from 1982–2023 and a canonical job-ladder model, we estimate that the arrival rate of better-paying outside offers to employed workers has fallen by roughly one-half since the 1980s. The decline is broad-based across demographic groups, is especially pronounced among younger workers, and is not offset by greater mobility along non-wage dimensions. We measure the strength of the job ladder using the gap between the wage distribution of all employed workers and that of workers newly hired from nonemployment (our proxy for the offer distribution). A larger gap reflects more frequent offers from higher-paying employers, which accelerates movement up the wage ladder. [Figure 3 shows that] in every decade, the distance [between the wage distribution and the offer distribution] has narrowed over time. Through the lens of a textbook job-ladder model, this narrowing indicates declining net upward job mobility. We estimate that the arrival rate of better-paying outside offers to employed workers fell by 51% between 1982–1991 and 2012–2021.

Takeaways by Macro Roundup® AI

  1. Using CPS microdata from 1982–2023 and a canonical job-ladder model, the authors estimate that the arrival rate of better-paying outside offers to employed U.S. workers fell by 51% between 1982–1991 and 2012–2021.
  2. The estimated decline in the job ladder is broad-based across demographic groups, is especially pronounced among younger workers, and is not offset by greater mobility along non-wage dimensions.
  3. The authors measure job-ladder strength as the gap between the wage distribution of all employed workers and that of workers newly hired from nonemployment, and find the gap narrowed in every decade, indicating declining net upward job mobility.

Related Articles:

  • Countries for Old Men: An Analysis of the Age Pay Gap — Administrative data on 38mm Italian and German workers show wages of older workers grew much faster than those of younger workers, a widening age pay gap the authors also find in fourteen other high-income countries. The authors argue workforce aging leaves fewer top hierarchy slots for younger workers, slowing promotions.
  • The Age Divide in the American Workplace — American workers over 50 earned roughly 35% more per week than workers under 30 in the late 1970s, a gap that widened to about 55% at its early-2010s peak before narrowing to 47%. Their advantage in access to top-quarter-paying management jobs also widened, from about 5 to 8.3 percentage points.
  • Zero-Sum Thinking and the Roots of U.S. Political Divides — Zero-sum thinking — viewing gains for one group as losses for another — is associated with greater support for liberal economic policies, stronger alignment with the Democratic Party, and weaker alignment with the Republican Party. The authors also find it linked to believing the QAnon conspiracy theory holds some truth and to sympathy for the attack on the U.S. Capitol.

AI Summary. A closure of the Strait of Hormuz has removed 550m barrels of Gulf crude, nearly 2% of annual global output, plus 7m tonnes of liquefied natural gas each month, equal to 2% of yearly supply. Western fuel prices have risen only modestly as 16 European Union governments subsidise consumers or cut fuel taxes.

Economist Staff The Economist
Date Posted:

50 days into the Iran war, the world is short ~550mm barrels of Gulf crude – almost 2% of 2025’s global production. Pre-war cargoes are being consumed, suggesting prices will soon rise to bring demand in line with the reduced supply.

Are stable fuel prices hiding a worsening global energy supply shortage?

Core argument: Fifty days into the Iran war, the world has lost 550m barrels of Gulf crude, nearly 2% of last year's global output, while each month the Strait of Hormuz stays closed costs 7m tonnes of LNG, or 2% of annual supply.

Fifty days into the Iran war, the world has lost 550m barrels of Gulf crude—nearly 2% of last year’s global output. Every month Hormuz stays closed, the world misses out on 7m tonnes of liquefied natural gas (lng), worth 2% of its annual supply. Yet in Western countries, which host the largest futures markets, pain remains limited. Petrol is a bit pricier, but most households can still afford to drive. Trucks keep trucking. Planes continue to fly. Fuel stocks remain close to pre-war levels. This comforting picture is deeply misleading. Three factors are pushing the world towards the cliff edge. Oil cargoes available to buy are drying up. Refineries are slashing output of fuel. And demand remains artificially high [for example] Europe has so far avoided demand destruction. Governments are working hard to preserve people’s purchasing power. Of the 27 European Union countries, 16 are using taxpayer money or cutting fuel taxes to shield consumers from higher prices. European refiners have thus barely slashed production.

Takeaways by Macro Roundup® AI

  1. Fifty days into the Iran war, the world has lost 550m barrels of Gulf crude, nearly 2% of last year's global output, while each month the Strait of Hormuz stays closed costs 7m tonnes of LNG, or 2% of annual supply.
  2. Pain in Western countries remains limited, with petrol only slightly pricier, trucks and planes still operating, and fuel stocks close to pre-war levels, a picture that is deeply misleading.
  3. Three factors push global energy markets toward the cliff edge: oil cargoes available to buy are drying up, refineries are slashing fuel output, and demand stays artificially high as 16 of 27 EU countries use taxpayer money or fuel-tax cuts to shield consumers.

Related Articles:

  • Are We Running Out Of Oil — An analysis of country- and product-specific oil markets identifies pockets of potential extreme tightness if the Strait of Hormuz remains effectively closed, with critically low supplies of the petrochemical feedstocks naphtha and liquefied petroleum gas in Asia and cross-product scarcity in multiple Asian countries.
  • Fighting Words: The Energy Transition in 2026 — Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
  • Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World — China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.

AI Summary. China earned about $3.4bn from exporting rare-earth elements and magnets in a year, while the U.S. Geological Survey estimates a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, over $600bn. This asymmetry gives Chinese export controls their leverage.

Edward Fishman Foreign Affairs
Date Posted:

Edward Fishman makes the case for deeper integration of Western economies in order to manage chokepoints; integration “can preserve the scale modern economies require while neutralizing the coercive power of rivals.”

What makes export controls on critical minerals so powerful?

Core argument: U.S. Geological Survey researchers estimate that a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, more than $600 billion.

Chinese rare earths offer a clear-cut case. In 2024, China earned approximately $3.4 billion from exporting rare-earth elements and magnets. Meanwhile, researchers at the U.S. Geological Survey estimate that a 30% disruption to the United States’ supply of the rare-earth element neodymium alone would reduce the country’s GDP by 2.2 percent—more than $600 billion. In other words, China would have to forgo no more than a couple of billion dollars in export revenue to inflict over half a trillion dollars of damage on the U.S. economy. This asymmetry is what gives Chinese export controls their power. It also highlights a broader reality about economic warfare. When they have a choice, states don’t weaponize interdependence—they weaponize dependence.

Takeaways by Macro Roundup® AI

  1. U.S. Geological Survey researchers estimate that a 30% disruption to U.S. supply of the rare-earth element neodymium alone would cut U.S. GDP by 2.2%, more than $600 billion.
  2. China earned roughly $3.4 billion from exporting rare-earth elements and magnets in 2024, meaning it would forgo no more than a couple of billion dollars in export revenue to inflict over half a trillion dollars of damage on the U.S. economy.
  3. The asymmetry between small Chinese export revenues and large U.S. losses gives Chinese export controls their power, and states with a choice weaponize dependence rather than interdependence.

Related Articles:

  • Underestimating China — China's productive capacity is three times that of the United States and exceeds the next nine countries combined, with its share of global manufacturing quintupling to 30% while the U.S. share halved to about 15%. The authors argue Washington must convert its alliances into a platform for pooled capacity building.
  • 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.
  • How Japan Built a Rare-Earth Supply Chain Without China — 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.

AI Summary. U.S. forces may have expended more than half of prewar inventory for four of seven heavily used munitions in the 39-day air and missile campaign against Iran, with rebuilding to prewar levels projected to take one to four years. These munitions are also critical for a potential Western Pacific conflict.

Mark Cancian and Chris Park Center For Strategic and International Studies
Date Posted:

A CSIS analysis finds restoring magazine depth to pre-war levels under current production pipelines will take ~ 1 to 4 years. New orders have a longer lead. They calculate that the US may have expended ~50% of its stock of 4 of 7 key munitions.

How long will rebuilding depleted U.S. munitions stockpiles take?

Core argument: In the 39-day air and missile campaign against Iran before the ceasefire, U.S. forces may have expended more than half of the prewar inventory for four of seven heavily used munitions.

In the 39 days of the air and missile campaign before the ceasefire, U.S. forces heavily used the seven munitions in Table 1. For four of them, the United States may have expended more than half of the prewar inventory. Rebuilding to prewar levels for the seven munitions will take from one to four years as missiles in the pipeline are delivered. These missiles will also be critical for a potential Western Pacific conflict. Even before the Iran war, stockpiles were deemed insufficient for a peer competitor fight. That shortfall is now even more acute, and building stockpiles to levels adequate for a war with China will take additional time.

Takeaways by Macro Roundup® AI

  1. In the 39-day air and missile campaign against Iran before the ceasefire, U.S. forces may have expended more than half of the prewar inventory for four of seven heavily used munitions.
  2. Rebuilding U.S. stockpiles of the seven munitions to prewar levels will take one to four years as missiles already in the production pipeline are delivered.
  3. The same munitions would be critical in a potential Western Pacific conflict, and U.S. stockpiles deemed insufficient for a peer competitor fight before the Iran war now face an even more acute shortfall.

Related Articles:

  • The First 36 Hours of War Consumed Over 3,000 U.S.-Israeli Munitions — The authors estimate replacing two destroyed U.S. radars would take five to eight years and $1.1bn for one and 12–24 months and $50m–$75m for the other, making supply-chain fragility and replacement timelines a greater constraint than materials cost. Both systems require gallium, of which China controls 98% of global supply.
  • Pentagon Approaches Automakers, Manufacturers to Boost Weapons Production — The Pentagon has approached U.S. automakers and other manufacturers about using their workers and factory capacity to boost production of munitions and other equipment as wars deplete stocks, asking whether they could rapidly shift to defense work. Most large non-defense manufacturers already hold Pentagon contracts, but these are typically limited in scope and value.
  • The Intellectual Spoils of War? Defense RD, Productivity and International Spillovers — The authors estimate that a 10% increase in government-financed R&D, largely defense, is associated with a 4.3% rise in privately funded R&D across OECD countries, indicating "crowding in" rather than "crowding out." They also find international spillovers raise private R&D abroad, though the overall effect on US productivity growth is modest.

AI Summary. A Taipei-based think tank estimates Taiwan shipped 136,010 drones to Europe in a single quarter, more than its full-year total of 107,433 units, which itself was over 40x the 2,574 units shipped the prior year. The figures illustrate the momentum of Taiwan's emerging drone industry.

Thompson Chau Nikkei Asia
Date Posted:

Taiwanese drone exports to Europe in Q1 exceeded 2025’s total. The exports have been concentrated in Poland and the Czech Republic, which are gateways to Ukraine.

Are Taiwan's drone exports to Europe surging on wartime demand?

Core argument: Taiwan shipped an estimated 136,010 drones to Europe in the first quarter of 2026, exceeding the 107,433 completed drones it sent to Europe in all of the prior year, according to calculations by the Taipei-based think tank DSET.

Taiwan's drone exports to Europe in the first quarter exceeded the total for all of last year, a think tank estimates, illustrating the emerging industry's momentum. The Taipei-based Research Institute for Democracy, Society and Emerging Technology (DSET) told Nikkei Asia that drone exports to Europe in the first quarter of 2026 reached 136,010. That surpasses the 107,433 completed drones Taiwan shipped to Europe last year, according to DSET calculations included in a new report released Wednesday. The 2025 figure itself already marked significant growth, more than 40-fold, from just 2,574 units the year before.

Takeaways by Macro Roundup® AI

  1. Taiwan shipped an estimated 136,010 drones to Europe in the first quarter of 2026, exceeding the 107,433 completed drones it sent to Europe in all of the prior year, according to calculations by the Taipei-based think tank DSET.
  2. Taiwan's drone exports to Europe rose more than 40-fold in 2025, to 107,433 units from 2,574 the year before, according to DSET estimates provided to Nikkei Asia.

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