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Washington has every right to try to address harmful trade imbalances but it’s hard to see what the benefits of these tariffs will be. Because steel and aluminum are liquid, global commodities, the tariffs will have little impact on...
ft.com/content/1ad2ff… via @financialtimes
@FinancialTimes ...American imports of either metal, or Brazilian and Argentine exports, except for some short-term bilateral disruption, and so it won’t help American metal producers (if it has any effect, it will be to help Chinese producers). It won’t help American farmers at all except...
@FinancialTimes ...perhaps for parsley farmers (apparently lots of iron in parsley). It won’t strengthen the Brazilian or Argentine currencies (especially the Argentine) and may even weaken them further. It will allow Argentines to blame Washington for a part of their problems and will...
@FinancialTimes ...embarrass Trump’s main South American ally. And like all tariffs, it fails to resolve the origins of trade deficits in capital imbalances. Was this done to pressure the Fed (cut interest rates or we'll break something)?
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Michael Pettis
@michaelxpettis
Good article. While IMF economists may be slowly coming around to the view that unfettered capital flows might not always be a great idea, most IMF officials and practitioners I know have long understood that they are almost never a good idea, at least for developing economies...
...I would add that they are not good for advanced economies either, and most economists (including John Maynard Keynes and Harry Dexter White during Bretton Woods) used to know this until quite recently.

The argument in favor of free capital flows rests on an implicit but..
...usually unacknowledged assumption: that international capital flows mainly reflect the uncorrelated decisions of rational, long-term investors to allocate capital to its most productive use (i.e. everyone is Warren Buffet), and that these flows force or allow countries to...
Read 8 tweets
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Michael Pettis
@michaelxpettis
Analysts are already worried that by the time Simandou iron ore comes to market, in five years’ time, demand from China, which consumes 50-60% of all the iron ore produced in the world, will have plateaued. But Chinese demand will...
ft.com/content/6729b6… via @financialtimes
@FinancialTimes ...will only plateau at these levels if GDP growth remains at 5-6% and is driven primarily by infrastructure investment. If GDP growth is much lower, as is very likely, and driven primarily by consumption, as is even more likely, there is no way China will continue consuming...
@FinancialTimes ...anywhere near its current level of iron ore.

According to the St Louis Fed, iron ore prices ranged between $11 and $15 from 1990 to 2004, after which the price surged to $190 in early 2011 on the back of massive Chinese buying. It dropped to $40 in December 2015 as it...
Read 4 tweets
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Michael Pettis
@michaelxpettis
I’ll gladly take the bet. Jeffrey Sachs is a brilliant guy but I don’t think he understands how the balance of payments works. His argument about why the RMB will become on par with the dollar in ten years is identical to the comments made...
scmp.com/economy/china-… via @scmpnews
@SCMPNews ...in the late 1980s about the yen. It accepts straight-line growth projections without taking into account the effect of enormous amounts of debt and the terribly difficult adjustments suffered by every country that followed the growth model China and Japan followed. It also...
@SCMPNews ...assumes that a global currency is an exorbitant privilege, rather than a burden.

There are also at least two factual errors. First, the piece says “The US now accounts for 15% of the world economy, down from around 21.6% in 1980, according to estimates from the IMF. By...
Read 6 tweets

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Julie Laumann
@Otpor17
In 2012, Tim Cook announced Apple would make a Mac computer in the US.

But when Apple began making the $3000 computer in Texas, it struggled to find enough screws. By the time the computer was ready for mass production, Apple had ordered screws from China nyti.ms/2HBT2QK
Apple CEO Tim Cook: “The skill here is just incredible. In the US, you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China, you could fill multiple football fields.” (h/t @scottlincicome)
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Christophe Barraud🛢
@C_Barraud
🇨🇦 🇺🇸 🇨🇳 🇮🇷 #Canada arrests #Huawei’s global chief financial officer in Vancouver – The Globe and Mail
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Penny Midas Rollo
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001/ [article content in this tweet series 001-180 reproduced with permission from Martin Howe QC of Lawyers for Britain @lawyers4britain]
#quote "Leaving the EU on WTO terms: pulling down the barriers to world trade
Introduction: why prices will FALL after Brexit, not rise" /002
002/ #quote "Over the past couple of weeks, the media have been full of lurid scare stories about what will happen if the UK leaves the EU on WTO terms, because negotiations with the EU do not result in a withdrawal agreement." /003
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Millennial Macro
@MillennialMacro
#demographics #militaries #economies #currencies
#USA
- Best demographics
- Largest military
- Largest economy
- Most used currency
- Liquid financial markets
- Open capital account
- Rule of law
- Best geography
- Can be self sufficient if required
- Not trade dependent
#USA
Top trade partners as of 30 June 2018:
- China: 15.2% (strategic competitor)
- Canada: 15.1%
- Mexico: 14.6%
- Japan: 5.1%
- Germany: 4.4%

The next 10 years could result in the below:
- Mexico (25%)
- Canada (20%
- Japan (7%)
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Bring the manufacturing (jobs) home while negatively impacting China's economy.
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cebglobal.com/talentdaily/au…
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Julie Laumann 🌎
@Otpor17
"Trump has used Harley-Davidson as an example of a US business that is being harmed by trade barriers. Yet Harley has warned consistently against tariffs, saying they would negatively impact sales"

Harley, hit by tariffs, shifts some production overseas apnews.com/6c8942f7363743…
Important issue highlighted by @riotwomennn: are tariff exemptions determined by bribes?

Corker: "22,000 companies have asked for exemptions.There is no basis to deal with them. Are they going to grant these exclusions based on political contributions?"
Trump’s trade war with the European Union is going to cost Harley-Davidson as much as $100 million a year and force the manufacturer to shift production out of the U.S. bloomberg.com/news/articles/…
Read 232 tweets
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Tori Whiting
@torikwhiting
Thread: What keeps me up at night about @realDonaldTrump trade policy and tariffs on steel and aluminum #tariffs
“It feels like 2008 again.”

This is what I heard during a phone call with my family in Michigan last night.
My family started a tool and die company in Michigan in 2002 in a tiny garage with rented equipment. Today they employ roughly 40 people.
Read 9 tweets

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