The Inflation Reduction Act went into effect one year ago Wednesday (Aug 16, 2022). In Korea and Europe, anger quickly emerged when it seemed IRA's tax credits for electric vehicles would discriminate against their exports.

Yet US imports of EVs have boomed.

What happened? 1/5 Dec 29, 2022: Treasury clarifies that **leased** EVs qualify for tax credits under a separate (Section 45W) provision of IRA.

Tax credit eligibility under 45W does NOT require the EV be assembled in North America.

So leased EVs imported from Europe or Korea were eligible... 2/5

The Inflation Reduction Act provoked a major EU-US spat over subsidies for electric vehicle supply chains. The Biden administration addressed some EU concerns by writing controversial rules to implement the law. So then what happened?

My latest 1/
piie.com/publications/w… First, some background on electric vehicles (EVs).

US really needs to cut tailpipe emissions to meet Paris climate goals.

US consumers have been slow to switch from internal combustion engine cars to EVs. In 2021, only 5% of new US vehicles were EVs.

China: 16%
EU: 18%

2/

US exports to China cratered during Trump’s trade war, and American sales of goods and services continue to suffer. Yet, US exports to China somehow reached "record levels" in 2022. Wait, wut?

Making sense of China's slow decoupling.

My latest 1/ 🧵
piie.com/blogs/realtime… China bought none of the extra $200 billion of US exports in Trump's "phase one" deal. In 2022, US exports to China improved only slightly.

US exports to China in 2022 are now 23% lower than if they had grown at the same rate as China’s imports from the world over 2018–22... 2/

As Biden and Xi meet in person, here is a recap of the status of US-China trade relations

FACTS from data (🧵, 1/6)
nytimes.com/live/2022/11/1… TARIFFS:

Most US-China trade war tariffs imposed over 2018-19 remain in place:
- US average tariffs are now 19.3%, covering 66.4% of US imports from China
- Chinese average tariffs on US exports are now 21.2%, covering 58.3% of imports from US

2/6
piie.com/research/piie-…

US imports of some Chinese products have tanked. Others are higher than ever. How Trump’s selective use of tariffs continues to matter for the question about US-China decoupling.

My new look at the data 1/ 🧵
piie.com/blogs/realtime… Trump kicked off the trade war with 25% tariffs in July 2018.

Today, US imports from China remain well below pre-trade war trend, and have only just returned to pre-trade war levels.

US imports from rest of the world are above trend and 38% higher than pre-trade war. 2/

What has happened to US exports to China since Trump's $200 billion purchase agreement ended on Dec 31, 2021?

A number of new (and old) factors have strangled US export growth to China in 2022. The future looks grim.

My latest (THREAD) 1/n
piie.com/blogs/blog/fir… Quick Phase One summary:

US exports increased in 2020–21 relative to the nadir of the 2018–19 trade war. But in the end, China bought none of the additional $200 billion of US goods and services it committed to purchase under Trump's agreement... 2/n

https://twitter.com/ChadBown/status/1491150434312294400?s=20&t=9toUjrt5p8k3E1tRU9Czaw

NEW: Even before Putin’s war on Ukraine, China put global food security at risk by restricting fertilizer exports. Just one more example of how China’s recent trade policies threaten today’s world trading system.

My latest, with the great Yilin Wang 1/ 🧵
piie.com/blogs/realtime… In 2021, fertilizer prices globally started to rise.

In July, Beijing ordered major Chinese fertilizer companies to stop exporting “to ensure the supply of the domestic chemical fertilizer market.”

In October, Chinese customs also mandated dubious additional inspections. 2/

NEW: 30 Days of War, 30 Days of Sanctions

As Putin's military assault continues, so does the extraordinary barrage of coordinated sanctions imposed by the US, EU, UK, Japan, Canada, Australia, S Korea, Switzerland and more.

Timeline tracker UPDATE 1/ 🧵
piie.com/blogs/realtime… FEB 21: The day after the Winter Olympics end, Putin signs decrees recognizing the independence and sovereignty of the so-called Luhansk People’s Republic and Donetsk People’s Republic regions of Ukraine. He sends Russian troops.

That led to an initial sanctions wave... 2/

US & UK announce deal to replace Trump's tariffs on steel and aluminum with new US tariff rate quota (TRQ) that goes into effect June 1, 2022. In return, the UK will remove its retaliatory tariffs on US exports.

Highlights include... 1/n

commerce.gov/news/press-rel… For STEEL:

TRQ: 0.5 million metric tons (MMT) under 54 product categories, allocated a la 2018-19 levels

"Derivative" products (added by Trump in Jan 2020) will no longer be subject to tariffs. 2/n

NEW: Putin's military assault on Ukraine has prompted the US, EU, UK, Japan, Canada, Australia and others to impose an extraordinary set of coordinated economic sanctions against Russia.

Our latest @PIIE TIMELINE tracks these sanction policies 1/ 🧵
piie.com/blogs/realtime… • Financial sanctions on Russian banks
• Asset freezes on Russian oligarchs
• Export controls preventing high tech from getting to Russia
• Import bans on Russian oil and gas
• Import tariffs, and revoking MFN treatment under the WTO
• More

We track them all here 2/n

USTR releases Annual Report on China's WTO Compliance

Some thoughts... 1/x

PDF: ustr.gov/sites/default/… Reflections on the Trump administration's very peculiar 'Phase One' agreement

2/x

In January 2020, former President Donald Trump signed a trade deal that committed China to purchase an additional $200 billion of US exports over 2020-21. The data are now in. In the end, China bought none of that extra $200 billion.

My latest, 1/🧵
piie.com/blogs/realtime… Biden was not to blame, as China was never on pace.

June 2020: only 54% of pro-rated targets
December 2020: 59%

Jan 2021: Biden arrives, but the deal was back-loaded!!! (Additional commitments for 2021 were more than 60% HIGHER than for 2020.)

China would never catch up.

2/13

WTO rulings disproportionately targeted US use of antidumping, safeguards and anti-subsidy tariffs. Unhappy with that, Trump ended the entire dispute settlement system in 2019. But the fix will mean reconciling trade remedies and China.

My latest, 1/14🧵
piie.com/publications/w… Trade remedies = antidumping, safeguards, countervailing duties.

By the end of 2019*, Group of 20 (G-20) use of trade remedies was the highest since the WTO was created in 1995.

(*Latest available data. Expected to rise with COVID-19 recession and new subsidies...) 2/14

USTR Katherine Tai gave an important speech today describing the Biden administration's new approach to the US-China trade relationship.

Tai highlighted the need to enforce Beijing's commitments under the Phase One agreement.

My latest explains why 1/🧵
piie.com/blogs/trade-an… Through August 2021, China purchased only 61% of the US goods expected at this point for the deal covering the period from January 1, 2020 through December 30, 2021.

The BIG question is WHY???

(Note new "scorecard" 🤓 👇🏼) 2/

1/ 🧵

On Mon. October 4, USTR Katherine Tai will give a speech to "lay out initial steps of the Biden Administration’s approach to realign the bilateral trade relationship with China."

Here are DATA summarizing the current US-China trade relationship...

https://twitter.com/USTRSpox/status/1443731218596519941?s=20

2/

Average US tariffs on imports from China remain elevated at 19.3%, more than six times higher than before the trade war began in 2018.

Average Chinese tariffs on imports from the United States also remain elevated at an average of 20.7%, up from 8%.

<<cancels plans for next week>>
<<starts warming up the chart-making machine>>

https://twitter.com/tradereporter/status/1443685109157220353

HAS ANYONE CHECKED ON THE TIMELINE, TO MAKE SURE IT STILL WORKS???
piie.com/blogs/trade-in…

tfw u open up the latest AER and the second article listed was written by your amazing former undergraduate student which just confirms what you had thought all along

(SHE should have been teaching that class, not you)

In their deals, Canada and Mexico agreed to VERs (voluntary export restraints).

If that is what the EU agrees to, the EU is in a legal bind with the WTO.

Here's why 🧵 1/

https://twitter.com/insidetrade/status/1442907213467578369

When the EU retaliated against Trump's tariffs in 2018, it did so under the argument that Trump's national security tariffs were a "safeguard measure in disguise"... 2/

piie.com/commentary/op-…

PITTSBURGH, PA: There is an item that is not on the US -EU TTC agenda which is actually really quite pressing — Trump-era US tariffs on European steel and aluminium.

by @Aime_Williams (from the Steel City)
ft.com/content/7e1a80… have edited @Aime_Williams to resolve any confusion from her non-US audience

US-CHINA TRADE UPDATE (THREAD)

On Friday, trade beat reporters for multiple media outlets reported that the Biden administration was considering a new "Section 301" unfair trade investigation of China.

This one reportedly would examine China's industrial subsidies. 1/ The Biden administration is targeting Beijing’s widespread use of industrial subsidies that give its companies an edge over foreign rivals

By @BobDavis187 & @Lingling_Wei
wsj.com/articles/biden… 2/

to de-stress from me and our daughters, my wife has indeed turned to sanctuary goat yoga and yes, jealous. yoga WITH BABY GOATS