Arthur Leichthammer

@Brad_Setser Perhaps silly question, but would a devaluation of the yuan by the PBOC enacted to respond to Trump tariffs ease deflationary pressures?

I remember when Chinese policy makers objected strenuously to the suggestion from the US that "overcapacity" could be an issue! 1/

In a new study, @Brad_Setser and I unpack how badly Germany’s trading relationship with China has backfired. And how a new government might help its industry weather the 2nd China shock. With terrific accompanying reporting in Handelsblatt and FT. 1/ cer.eu/publications/a…

🇺🇸 [#Trade] What are the challenges of #Trump’s re-election for the EU on economic/political risks, EU vulnerabilities, and the need for unity and trade diversification? A Franco-German perspective by @elvirefabry & @ALeichthammer from @DelorsBerlin 👉 institutdelors.eu/en/publication…

My retweet of Ling-Ling Wei's comment that China's economy is actually in a bit of trouble prompted a number of these kinds of comments. I hadn't realized quite how many people still put faith in the official Chinese numbers. So some data highlighting signs of weakness 1/

@fbermingham Together with @elvirefabry, we wrote a policy brief on how the EU can (/must) prepare itself for the inevitable upcoming negotiations, highlighting the varying economic exposure MS face - could be of interest! delorscentre.eu/en/publication… hope you're well!

After the bonhomie of the European Council, a message from Trump to EU leaders this morning: buy US energy, or face tariffs "all the way"

@Brad_Setser Makes sense! Overcapacity instrument would be quite a fundamental change indeed

@ALeichthammer two ideas I have heard -- rolling out a new overcapacity instrument ... or just changing the EU's tariff binding and negotiating bilateral deals with countries that the EU wants to trade freely with that don't already have FTAs ...

Net steel exports (on a trailing 12m basis) have already topped 100m metric tons (more than the US produces). And the levels from the last 3ms are consistent with a new all time high ...

@Brad_Setser Interesting as always, thanks Brad. Do you have a hunch what the EU intends to do when safeguards expire mid-2026?

Issue right now is less for the US, with a well protected market, and more for pretty much everyone else -- starting with the EU, which cannot rely on safeguards that technically protect against the diversion from the US 232 (not China directly) for much longer

It‘s happening! After 25 years of negotiations, the EU is about to sign its mega trade & political partnership deal with South America‘s Mercosur bloc. Contrary to what critics say, I‘d argue it‘s not only geopolitically crucial but also good for farmers & environment. Thread 1/

Do Trump and Vance want to break the dollar? Donald Trump wants a weaker dollar in order to structurally tackle trade deficits. But he is not only clashing with China, Fed Chairman Jerome Powell is also thwarting him. A 🧵 /1

Many of you may have noticed that I included in the post script a special note about one fascinating aspect of the China-exports-to Mexico story: Of that expected 480,000 cars Mexico imports from China this year, about 300,000 will be Chinese brands. And - are you ready for this - another 180,000 will be Chevy and Ford and VW products made in China at factories run by their joint ventures in China. What is going on here? It is no secret that Ford, GM, and VW sales are collapsing in China. They are suddenly sitting on massive idle capacity. So, they have re-purposed their joint venture factories to export to markets worldwide. The Chinese partners of course get to pocket half the revenues and half the profits. This is a further evidence of the power of China as a car export juggernaut, with all of the still-to-be-understood benefits and dangers to global automakers.

Why didn’t that make a difference in the elections? For a sharp critique of why the Inflation Reduction Act failed to make a dent in the election, see @alexbronzini in The Guardian x.com/alexbronzini/s…

🗓️Where do we want to stand in 2029? Next Friday, 3.30 PM, we wrap up the #PariserPlatzDialogue with an online panel summarising the discussions. Joining us are @tiagoant, @Mij_Europe, @JosephdeWeck & Nadia Pantel, moderated by @onethuthree. Register now 👉delorscentre.eu/en/events-at-t…

This is big. The European market remains the most viable option for Chinese investments in the EV sector - the EU should act on the back of this strength and use it to boost its struggling domestic sector. ft.com/content/f4fd3c…

end/ If you want to find out more how the EU should utilise Chinese FDI to support its struggling car industry, have a read here: delorscentre.eu/en/publication…

7/While the hearings often lacked substance, one promising stand-out for me was climate Commissioner-designate Hoekstra ruling out backtracking on either policy, arguing that industry needs predictability. The UK's flip-flopping tells a cautionary tale: reuters.com/world/uk/briti…

🧵 My new policy brief outlines how the EU can leverage Chinese FDI in its domestic EV value chain to boost competitiveness, innovation and high-quality employment. However, it is important to remember that any such efforts fundamentally hinge on increasing European demand