Peter Harrell
@petereharrell
Non-Resident Fellow, Carnegie Endowment. Attorney. Host, “Security Economics” podcast. Posts mostly on international economics. Opinions my own.
Next month, @SecScottBessent and @howardlutnick are set to present recommendations for a US "sovereign wealth fund" (SWF). In this week's Security Economics Podcast, former WH official Daleep Singh explains what a SWF is, and how a US one could work. youtu.be/iLZTUD1xQdk
Preliminary thoughts on the U.S.-Indonesia deal term sheet and the U.S.-Japan deal press (no Japan paper yet, so updates to come), along with broader comments: 1. The Indonesia term sheet sets tariff rates at 19%, and the Japan deal at 15%. The 15% for Japan appears to cover at…
One reason tariffs haven't affected the stock market more is that they primarily affect the "old economy". GM has $187B in sales but a market cap of just $50B, while Nvidia has $135B in sales and a market cap of $4.1 trillion. GM is much more exposed to tariffs than Nvidia.
Breaking: General Motors' profit shrank 35% last quarter after taking a $1.1 billion tariff hit on.wsj.com/4eXz66U
I actually think this is real progress. The Commission has (I hope) recognized that it can no longer make do with pretend deals that offer the illusion of progress without resolving the very real underlying problem ... 1/
THE EUROPEAN DELEGATION EXPECTS TO REACH NO SUBSTANTIAL DEALS FROM THE CHINESE MEETING: EUROPEAN OFFICIAL EUROPE HOPES TO MAKE CLEAR WHAT IT WANTS BEIJING TO DO TO FIX UNSUSTAINABLE ECONOMIC RELATIONS AND REBALANCE TIES: EUROPEAN OFFCIAL
👇 Great read by the CEO of a US aluminum manufacturer (and classmate of mine from law school!) about how the scope of Trump’s tariffs is undermining US manufacturing, while a more targeted but still tough approach to tariffs would be useful. insightonbusiness.com/insightonmanuf…
I recalculated China's potential trade diversion to include all regions and control for double-counting. In Q2, China potentially found replacement markets for 82% of its lost exports to the United States on a product-by-product basis.
Facing U.S. tariffs, China’s exports to the U.S. are down—while exports to Southeast Asia are up. Is that trade diversion and potential transshipment? My estimate: at most 34% of the increased PRC exports to SE Asia in Q2 could reflect trade diverted from the United States.
responding to tariffs: amazon raises prices on the cheapest 50% of goods (left) while cutting more expensive items (right)
Delta (the biggest US customer of Airbus) flew over and around the initial US tariffs back in 2020 and 2021 ... Won't be the first time airlines have done a bit of tariff avoidance ...
RYANAIR WEIGHS REGISTERING NEW BOEING PLANES IN UK TO AVOID TARIFFS - FT
Brussels is signaling readiness for a full-blown trade war if Trump moves forward with above-10% tariffs on Aug. 1 rather than striking a deal. This would be counterproductive for both sides. Thoughts on costs and getting to yes: 1. First, much like the trade war the US had with…
If Trump doesn’t reach deals with big U.S. trade partners before August 1 and instead imposes threatened higher tariffs, I expect U.S. trade war costs will finally start to bite. An analysis: 1. Credit to Trump, to date trade war costs have been lower than initial estimates.…
With new Section 232 investigations into drones and polysilicon, Trump is now responsible for more than half of all Section 232 investigations since 1962. Some unsolicited advice on how to make 232 tariffs more effective: 1. Boost manufacturing by offering rebates based on…
Banning use of Chinese kit in U.S.-connected submarine cables, which carry the vast majority of international internet traffic, is a smart security move by the FCC. (And also a reminder that the FCC has strong national security authorities)! ft.com/content/8ac34f…
Looking for July 4th reading? I'm honored to have an article in the Journal of Int'l Econ Law exploring how trade deals can encourage our allies to cut their dependencies on China. "How an economic security pact might work in practice." academic.oup.com/jiel/article-a…
No details on the U.S.-Vietnam trade deal Trump announced on social media, but my take on what it might look like and signal about Trump trade policy. Analysis: 1. Trump stated that Vietnam is will tariff U.S. products at zero. It isn't clear if this covers literally…
I disagree with reimposing max pressure on Cuba—I’m doubtful an embargo first imposed in 1960 will suddenly work. But doing it on the same day Trump terminated most US sanctions on Syria (a good move) does message that sanctions are not forever and that change will be rewarded.
Multiple trade developments this week, including implementation of China & UK deals, "terminating" Canada talks, and signals regarding future developments. A rundown: 1. "Reciprocal" tariffs update: We are less than two weeks out from July 9, when "reciprocal" tariffs are…