CFR senior fellow. Views are my own. Retweets are not endorsements. Writes on sovereign debt and capital flows.
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But in some sense yes -- exports to the US were $33b, and they should have been $45-50b (recently exports to the US and EU have basically tracked)
Dr. Rey also -- and correctly -- pushes back on the notion (she says "misunderstanding") that the dollar's international role requires that the US run current account deficit (reserve inflows can fund capital outflows)
I would not believe my spreadsheets if it wasn't 100% clear exactly what was going on -- big US pharma (and some European pharma companies) rushing high value goods into the US to beat the tariffs ...
That weakness is obvious from the 15% of GDP current account surplus or any examination of purchasing power parity. In real effective terms, the Taiwan dollar is down 25% from its pre-Asian financial crisis level (i.e. the mid 90s)
The reason, of course, is that Japan now runs a massive surplus in its investment income account (something the IMF with its obsession on fiscal debt tends to overlook). A weak yen of course inflates foreign earnings, and rising global rates
The IT industry also led the tariff front running charge.
Measures of balance sheet concentration should be viewed with a grain of salt as the IMF has a lot of unused financial firepower these days -- but $50b plus is a lot of exposure to a single country even for the Fund.
Looking at the bilateral flows first raises a basic issue -- whether to use the US import data ($440b, somewhat over 2 pp of China's GDP) or the Chinese export data ($530b, somewhat under 3 pp of China's GDP).
A better chart than the BoA chart -- straight from the US balance of payments but with the "Belgium/ euroclear" adjustment. LT bonds includes Agencies. No significant net purchases and sales in the US data since 2016
Net interest payments to the rest of the world have gone up because rates have gone up, nothing fancy --
The yuan did depreciate a bit in April (the fix dipped below 7.2) but not by all that much. The small move was likely a bit of a signal to the US, but so far the yuan hasn't central to China's response to this round of tariffs (@marcmakingsense got this right)
The settlement series has been volatile -- large inflows with the carry unwind last fall, large sales in January in anticipation that the yuan might move with Trump -- but it has been very stable the last two months
The right numbers for China.
The big surprise is that in March, amid the first round of tariffs, the state banks continued to add to their net foreign assets ... net foreign assets topped $1.1 trillion, gross foreign assets are close to $1.3 trillion
Europe's surplus tho is inflated by tax avoidance in subtle ways (being the home to Ireland and Luxembourg) while China's surplus (just over $400b in the reported data) is -- in my view -- wildly understated in the official Chinese data.