US Companies Paid Over $22 B in Irish Taxes
Per the WSJ US firms other than Microsoft and Apple paid at least $12 billion in corporate income tax to Ireland last year (Apply and Microsoft haven't reported yet, but both paid ~ $5b to Ireland in 2024 ... so the total should rise to above $22 billion ...) Lilly is currently in the lead 1/
Startup Think Tank Leads Deep China FX Policy Analysis
Really? Name one start-up think tank that analyzes the latest twist and turns in China's fx policy with any depth. I would humbly submit that this blog is at the analytical frontier, ahead of what most of...
China’s Surplus Soars, Europe Squeezed by Energy and Competition
China's manufacturing surplus looks to have taken another leg up. Always a good idea to get confirmation in March given the new year distortions. But Europe looks to be getting squeezed both by China and higher energy prices https://t.co/8EZnqysgKL
10% Oil Supply Cut Could Spike Prices $150
Ouch. A standard estimate (ballpark) is ~ 10 mbd/ 10% of world supply is now off the market. Some elasticities were closer to -0.1, which implies a price hike of up to $100. This elasticity would...
Taiwan Imports Surpass China, Undermining Trump’s Bilateral Focus
The Trump Administration makes way too much of the bilateral balance with China -- Monthly imports from Taiwan alone topped imports from China in the last quarter of data 1/2 https://t.co/IOKB3Ii1lH
China's EU Trade Surplus Rises in First Two Months
In news not related to the Straights of Hormuz, China's trade surplus with the EU ticked up in the first two months of the year 1/ https://t.co/uWb594zrUq
China Refuses to Tap Reserves for Global Supply
Well, China isn't going to dip into its strategic reserves to help supply the rest of the world ... 1/2
Oil's Global Price Cracks Under Stress, Spreads Surge
Oil is a almost perfectly fungible commodity* with a single global price ... except during periods of stress Via JP's Natasha Kaneva, the spread between North Atlantic sweet light and the oil Asia normally buys has reached extreme levels * setting...
China’s State Banks Shift Forward FX Book Post‑2010
The visible forward book of China, Inc (state banks plus PBOC) -- or at least changes in the book after 2010 FX settlement data via Bloomberg 1/ https://t.co/IgUc2aEtHT
Urgent: US Multinationals' Massive Tax Avoidance Demands Attention
Trying to get the folks who matter to care about industrial scale tax avoidance by US multinationals ...
US and Global Tax Reforms Boost Irish Corporate Tax Revenue
On the eve of St. Paddy's day I raise a glass to my Irish friends -- offer a toast their international tax wizardry. Every international tax initiative, and every US tax reform, somehow ends up increasing the Irish corporate tax...
Tariffs Shift US‑China Trade Balance, Not Global Flow
A case study in how tariffs can change the bilateral trade balance but not the global trade balance -- the US is now importing a ton of computers, but essentially zero of those are registering in customs as Chinese made 1/...
Overcapacity Rules Target All Except China
The real problem isn't the overcapacity (really state support for further investment in sectors with overcapacity) 301 against China. It is the overcapacity 301s against everyone else. 1/
China’s JV Rules Succeed via Approval Leverage, Tariffs, Cheap Currency
This is a critical point -- China's JV requirements worked b/c China had to approve investments (so it had leverage) generally speaking & b/c China had relatively high tariffs (25% on autos) and an undervalued exchange rate so there was a...
January Trade Data Masks Deeper Economic Trends
I can see why the Trump administration likes the January trade data. Imports didn't move much v December and exports bounced back from a December dip. But there is a bit more going on under the hood 1/ many...
Yen Hits Intervention Threshold, MoF Faces Decision
As Bloomberg notes, the yen has reached levels where Japan's Ministry of Finance (MoF) and perhaps Secretary Bessent have a choice to make; the yen is clearly in the zone where intervention is a real possibility 1/ https://t.co/gE34g8gEW4
Ireland Cashes $6.6B Pharma Tax, Fuels US Investment
Clever marketing by Ireland. Most of this is private investment that would have happened anyway. And trivial compared to the tax gains Ireland is reaping from US firms -- Eli Lilly disclosed tax payments to Ireland of $6.6...
China’s 2025 Car Exports Eclipse Germany Despite Population Advantage
Yes, the numbers are that crazy. Not impossible obviously, but crazy. The increase in China's vehicle/ car exports over the course of 2025 was ~ 2m cars and it acceletated toward the end of the year. ...
Unbalanced Globalization Persists: Insights From PGIM’s Daleep Singh
A conversation between me and PGIM's Daleep Singh (recorded before the bombs started falling on Tehran) that covers a number of big macro themes -- including the persistence of an unhealthy and unbalanced forms of globalization. https://t.co/9i02acEiiE
China's Trade Surplus Grows as Property Recovery Stalls
Frustrating. China won't use the "clean" balance sheet of the central government to support a real recovery from the prolonged property market slump. The net result: a rising trade surplus supports China's growth at the expense of its trading...
China's Economic Surplus Outpaces Global GDP Share
One of my better charts -- shows China's surplus relative to global GDP. Has had a big impact I think ... https://t.co/xkL0hjBjP1
U.S. Becomes Net Energy Exporter, Yet Oil‑Price Sensitive
One of my higher conviction views: the US is now a net energy exporter (LNG more than oil) but it is best understood as an oil importer that is uniquely sensitive to oil price swings. 1/
Korea's Rare Mix: Booming Stocks, Huge Surplus, Weak Won
Korea is a super interesting case (even before the latest events in the Gulf). Surging current account surplus (10% of GDP), surging domestic stock market and a very weak currency are an unusual combination 1/
Trump‑Xi Summit Focuses on Beans, Boeings, Oil
So the agenda for the Trump-Xi summit will reduce to 'beans, Boeings and barrels (of oil)? 1/
Yuan Gains Return Real Exchange Rate to 2024 Levels
The yuan's appreciation against the dollar over the last few months looks to have pulled China's real exchange rate back to its end 2024 levels (February is my estimate based on the CFETS index) 1/ https://t.co/KtxZcE3nT7
Low Tariffs Make New Trade Deals Marginal; Boost Domestic Demand
I very much agree with this. For most products and for most countries (the US is now an exception, China has been a bit of an exception) tariffs are already generally low, so the incremental impact of a classic free trade...
Oil Shock Math Reveals Dwindling Exporter Surplus, Reshaping Trade
Some basic oil shock math, focusing on the impact on global trade ... Remember that we are starting from an unusually low surplus in the fuel exporting economies ... 1/ https://t.co/WIeQBspqCY
Asia's Undervalued Currencies Poised for Explosive Gains
Interesting piece from Bloomberg's Shuli Ren, on the risk that Asia's wildly undervalued currencies might have an explosive appreciation ... 1/3 https://t.co/j9M2wdl5ED
Korea Leads 2025 Surge in US Equity Inflows
If there is a real risk off move (& it is still an if) the structure of the inflows that have covered the US current account deficit will matter. Foreign buying of US equity surged in 2025, and no where more...
Korea and Taiwan Set for Massive Chip Surpluses
If there isn't a new energy shock (a big if), the surpluses of the chip exporting powers (Korea and Taiwan) are going to be absolutely stunning this year. 1/2 https://t.co/N2A7u4k1ai
IMF’s No‑Bailout Stance Pushes China, Ecuador Back to Markets
Striking that China has taken $2 billion off the table since 2021 while the IMF put $2 billion in ... Talk about not using IMF funds to bailout China back during the pandemic turned out to be just that, talk. You...
Strong Current Accounts Can't Stop Taiwan, Korea Currency Weakness
Taiwan's currency has depreciated even as Taiwan's current account has soared (to 20% in calendar 2025, with 30% expected in 26). But Taiwan is not alone -- the Korean won is also very very weak even as Samsung...
Bloomberg Overlooks Key Current Vs. Financial Account Split
An interesting article from Bloomberg -- but one that misses an important part of the real story by following the recent advice of CATO and the WSJ oped page and ignoring the classic split in the balance of payments between...
Yuan
Not a total surprise -- the pace of appreciation was clearly pulling in funds betting on a further rise, and the yuan is heading toward levels where the PBOC has resisted appreciation in the past ... 1/
China's True Trade Surplus Far Larger Than Reported
China's surplus is understated after 2022, as China adjusted its BoP methodology to shade its reported surplus down -- and given China's size, its surplus is massive v the global economy (even more true using customs trade) 1/2
TSMC Fuels Taiwan's $70B Quarterly Surplus, 33% GDP
A day that was a long time coming -- TSMC's dominance of chip manufacturing led Taiwan to post a $70b quarterly current account surplus in q4. That is $280b annualized, or a surplus of ~ 33% of GDP Never...
China’s Role: Minor Export Market, Major Input Supplier, CNY Undervalued
It means a lot less than this. As an export market China is way less important than the US to Germany/ the EA. As a source of consumer & intermediate inputs China is of course a massive supplier,...
Nuanced Take: BoP Deficit Matters,
I actually don't think Mark and I are that far apart (tho I wouldn't start by arguing that a BoP deficit is meaningless, as I certainly find value in some cuts of the balance of payments + get annoyed when...
Decoding Congress's 1975 Balance‑of‑Payments Language
This is a thread that only Adam Tooze, a few international economist and a couple of very well paid trade lawyers are likely to enjoy … The basic question is what did Congress mean back in 1975 when they wrote about...
Germany Urges China to Let RMB Appreciate, Reversing Stance
Germany joining the chorus call for China to allow the RMB to rise -- a big change from 15 years ago, when Germany didn't think China's currency management was its problem https://t.co/1J5Z0lrxma
WSJ Dismisses Balance of Payments, Sparks Skepticism
Well, the WSJ oped page lost me with statement that the balance of payments is a non issue ... 1/2
Eli Lilly's 2025 Irish Tax Bill Doubles U.S.
Whoah Nellie. Looks like Ireland's list of its top 3 corporate tax papers will need to be updated for 2025 ... Eli Lilly reported paying $6.6b to Ireland in 2025 (2x its US federal income tax payments) https://t.co/MEw7WMzPft
France Revives Interventionist
Paging President Macron as well -- Old fashioned imbalances are back, as is intervention (now done through the back door) ... which sets the ground work for France to try to actually achieve something at its G-7
PBOC Buying $100B Monthly to Curb Yuan Surge
The mandarins at the PBOC are in a difficult spot -- a faster pace of CNY appreciation against the dollar has convinced Chinese exporters to bring funds back home, and driven the need to buy $100b a month (give or...
US Government Fails to Push Firms Toward Supply‑Chain Security
Great story in the New York Times highlighting the difficulties that the US government has faced in getting the world's most profitable companies to take supply chain security seriously, and reduce their exposure to a crisis in the Taiwan straights 1/...
Europe Must Block Chinese‑Made Cars From Flooding Market
Good points from Thorsten Brenner -- The "car bosses" are tempted to use their Chinese factories to supply the European market. Deindustrializing Europe isn't their concern. European policy makers need a policy framework that makes this impossible...
China May Pause Reserve Dedollarization if US Eases Taiwan Stance
So no more dedollarization of China's formal reserves if the US softens its Taiwan policy? Tis an option that China is at least considering per Lingling Wei and the WSJ 1/ https://t.co/365Y8wHJV4
China Buys FX as Yuan Rises to Curb Appreciation
A little more complicated -- China consistently buys more fx when the CNY is appreciating (whether for structural or cyclical reasons). Exports start converting, and controlling the pace of appreciation takes intervention. Subtle point, but clear in the data
China’s $100B/Month FX Buying Blocks Dollar Diversification
Me, in the Financial Times -- On the surge in China's intervention, and the impossibility of diversifying away from dollar assets/ Treasuries when the state banks are buying $100b a month in FX 1/ https://t.co/Pc78czuld9
Bessent: A Trader‑politician Unlike Typical Treasury Secret
Interesting on many levels. Bessent is much more of a trader (and yet also much more political) than most Treasury secretaries ... https://t.co/7m06uOU5eQ