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onto International Economics: IB Economics

January 27, 6:45 AM

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From www.bbc.co.uk - January 27, 1:29 AM

Graham Watson's insight:

Amidst all the ongoing trade nonsense, some good news:the EU and India have concluded a trade deal that should remove tariffs on a great deal of trade between the regional economic grouping and the world's largest economy.

Whilst India will get "preferential access" into the EU for its textiles, leather, marine products, handicrafts, gems and jewellery, it's also sought to protect strategically important sectors, such as "dairy, cereals, poultry, soy meal, certain fruits and vegetables".

This is a massive deal: as the article notes "The EU is India's largest trading partner in goods, with bilateral merchandise trade reaching $136bn (£99.4bn) in 2024-25" having doubled over the previous decade.

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Economy

International Economics: IB Economics

A collection of articles relating to the 'international' elements of Economics and relating to IB, Pre-U and A-Level Economics.

Curated by Graham Watson

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Scooped by Graham Watson

Today, 6:37 AM

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As US influence wanes, the Chinese trade surplus strangles manufacturing across the globe | US economy | The Guardian | International Economics: IB Economics | Scoop.it

From www.theguardian.com - January 31, 7:00 AM

Graham Watson's insight:

This Guardian piece looks at the changing nature of the global economy and argues that China has an opportunity to usurp the US, but will only do so if it adapts. Increasingly, China's trade surplus looks problematic, not least because of the diminishing returns to its export-led growth, albeit propped up by state support and an undervalued currency.

As the US notes in a submission to the WTO: "“A single country’s manufacturing production exceeds that of the nine next-largest manufacturing countries combined". That is a remarkable state of affairs.

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January 31, 5:44 AM

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From www.theguardian.com - January 31, 5:00 AM

Graham Watson's insight:

Not much economics here. However, I'll supply the answer to the question.

No. CEOs are quite happy to take the money and prepared to swallow their ethical concerns to do so.

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January 30, 11:44 AM

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From www.bbc.co.uk - January 30, 8:12 AM

Graham Watson's insight:

The President has nominated his man for the Chair of the Federal Reserve, Kevin Warsh. It's not a surprise, Warsh was mentioned as a possible Fed Chair during the first term of President Trump's time in office, and he's become a vociferous critic of the Federal Reserve. In my experience, we're likely to find that this changes once his tenure begins.

And a cautionary tale, as a Federal Governor between 2006 and 2011, he had a "hawkish" reputation, which is indicative of him keeping interest rates higher for longer, keeping inflation under control. These days though "he's seen as a voice that would support lower rates in the near term and argued the Fed should shrink its balance sheet in order to bring down short-term interest rates". One wonders what brought about the Damascene conversion.

And then you look a little deeper and discover that he's got familial connections with the Trump White House, via his billionaire father-in-law and all becomes clear.

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January 30, 2:15 AM

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From www.bbc.co.uk - January 29, 7:22 PM

Graham Watson's insight:

I'd hesitate to call this trade policy, it's more evidence that the lunatics are in charge of the asylum. President Trump has threatened 50% tariffs on Canadian planes, and to decertify those currently operating in the US, something that the White House later rowed back on - presumably because of how it would damage the US aviation sector.

He's also keen to re-emphasise the threat of 100% tariffs for Cuba for importing Venezuelan oil.

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January 29, 10:02 AM

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US leads record global surge in gas-fired power driven by AI demands, with big costs for the climate | Greenhouse gas emissions | The Guardian | International Economics: IB Economics | Scoop.it

From www.theguardian.com - January 29, 8:58 AM

Graham Watson's insight:

Bad news for the environment with the news that the US has been responsible for a marked increase in gas-fired electricity generation spurred by the increased demand for power from AI, among other things.

Of course, not only are there negative externalities associated with such a source of energy but the worry is that, in the short-run, the demand for power is going to outstrip supply, and given the inelasticity of the latter this is going to result in significantly higher prices for consumers too.

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January 28, 10:28 AM

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From www.theguardian.com - January 28, 5:23 AM

Graham Watson's insight:

On Tuesday the dollar fell by the largest amount in a single day this year, and cumulatively it means that, after falling by 10% since the start of the year, it's at its lowest level for 4 years.

Of course, this is all part of the President's masterplan, and not a function of increased uncertainty, his ongoing threats of trade wars and invasions, and the attractiveness of precious metals and other currencies, notably the Swiss Franc and the Euro, as alternative safe havens. There are both pros and cons to a dollar depreciation. both for the US and the global economy, and you might want to think these through - everything from US economic performance to the cost of debt interest repayments for LEDCs.

But, as far as the man himself is concerned: "The dollar’s doing great". Whatever that may mean.

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January 27, 6:45 AM

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From www.bbc.co.uk - January 27, 1:29 AM

Graham Watson's insight:

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January 26, 3:34 AM

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From www.theguardian.com - January 25, 1:33 PM

Graham Watson's insight:

Alas, poor Mark Carney having to respond to President Trump in terms that the latter will understand. IN the light of the US threat to impose 100% tariffs on Canada exports to the US, the Canadian Prime Minister has tried to defuse the threat by highlighting the nature of the recent Canada-China trade deal and the relatively few tariffs that have been lifted.

Unfortunately, as I'm sure Mr. Carney knows all to well, the fact that his speech at Davos outshone the rambling incoherence of the President is probably more of an issue that the realities of international trade.

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January 25, 6:33 AM

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Is the supreme court ready to stand up to Trump over Federal Reserve attack? | Federal Reserve | The Guardian | International Economics: IB Economics | Scoop.it

From www.theguardian.com - January 24, 7:00 AM

Graham Watson's insight:

The Guardian seems to think that the Supreme Court is likely to oppose President Trump's attempts to bring the Federal Reserve to heel. Last week saw them seem sceptical about removing Federal governor, Lisa Cook, and the implications of this for central bank independence, and the prospect of such a move triggering a recession because of a lack of wider confidence in the economy.

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January 25, 6:24 AM

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From www.bbc.co.uk - January 24, 10:40 AM

Graham Watson's insight:

President Trump' has clearly read the world famous "How to Make Friends and Influence People" in his conduct of trade policy; this is another example.

No only will Mark Carney, no doubt, be devastated at being disinvited from the Board of Peace, but the prospect of the US levying 100% tariff if Canada concludes a trade deal with China will be more of a concern. It seems as though the President now wants to determine the trade policy of sovereign nations.

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January 22, 8:37 AM

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Trump’s bold economic promises on the campaign trail have led to a policy salad | US economy | The Guardian | International Economics: IB Economics | Scoop.it

From www.theguardian.com - January 22, 6:00 AM

Graham Watson's insight:

At last, an objective assessment of the singular failure of President Trump's economic agenda. No wonder he's off in pursuit of "Bread and circuses" abroad to distract the electorate.

This Eduardo Porter looks at campaign pledges to reduce food and energy prices, halve the cost of a new home and contrasts them with the prospects of tax cuts for the rich. Trumponomics: much sound and fury, signifying nothing?

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January 22, 3:34 AM

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The ‘rules-based order’ Davos craves has bigger problems than Trump: it represents a world that no longer exists | Larry Elliott | The Guardian | International Economics: IB Economics | Scoop.it

From www.theguardian.com - January 21, 11:19 AM

Graham Watson's insight:

Larry Elliott argues that President Trump's effects upon the existing world order are self-evidently a bad thing but that they also illustrate how it has failed to keep pace with the changed nature of the global economy.

He highlights how emerging economies have altered the world's economic gravity and how this hasn't been reflected in the nature of international financial institutions, which are still dominated by the old guard. It is this, rather than just Trump, that he sees as responsible for the collapse of the old, rules-based consensus and irrespective of who is President of the United States, this requires tackling.

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January 21, 12:50 PM

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From www.bbc.co.uk - January 20, 11:54 AM

Graham Watson's insight:

No surprise this: the EU has suspended the process of approving the trade deal agreed with the US in the Summer. As the Treasury Secretary suggested "Sit back. Take a deep breath. Do not retaliate".

Well, that's what we're doing. Oh, and by the way, you started this and you're the party that's continuing to destabilize the global economy.

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Today, 6:33 AM

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From www.theguardian.com - Today, 3:00 AM

Graham Watson's insight:

It seems as though there's likely to be increased co-operation between developed economies to guarantee the supply of rare earth metals. Australia has announced that it is going to establish a strategic reserve of the minerals, and there's also talk of the US guaranteeing a minimum price, although the Trump government seems to be opposed to this.

Watch this space.

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January 31, 5:16 AM

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From www.bbc.co.uk - January 30, 5:15 PM

Graham Watson's insight:

The BBC analyses what the wider implications of Trump's nomination for Federal Reserve Chair are for the wider economy. It touches upon Kevin Warsh's previous policy positions - many of which run contrary to what the President seems to want - and the key issue of central bank independence.

The interesting thing is how recently his views appear to have aligned with those of the President, which makes it hard to see past the conclusion drawn by Thierry Wizman, global foreign exchange and rates strategist at Macquarie Group: ""Warsh is not the Fed's guy, he is Trump's guy, and has shadowed Trump on monetary policy almost every step of the way since 2009". And that might be the issue - the single most important characteristic required to for the role: integrity.

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January 30, 2:20 AM

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From www.bbc.co.uk - January 29, 7:06 PM

Graham Watson's insight:

The BBC briefly analyses the fall of the dollar, with Robin Brooks, senior fellow at the Brookings Institution and former FX strategist at Goldman Sachs asserting that the dollar's decline "is a reflection, basically, of markets saying this kind of chaotic back and forth hurts the US more than anyone else".

Furthermore, the market suggests that there's been a limited sell-off of US Treasury, which will both affect the exchange rate and has the potential to marginally increase US bond yields.

And whilst a depreciating currency can act as a type of automatic stabiliser, Brooks also warns that "if it's the market rendering a verdict on poor policies, he warned 'that is probably a very important signal'.

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January 30, 2:08 AM

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From www.bbc.co.uk - January 29, 4:48 PM

Graham Watson's insight:

Watch this space.

Some call in neocolonialism. Others see it as the free market.

Mr.Putin probably sees it as vindicating his position in Ukraine.

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January 29, 2:16 AM

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From www.bbc.co.uk - January 28, 2:03 PM

Graham Watson's insight:

Fun and games in the US, as the Chairman of the Federal Reserve announced they were continuing to hold interest rates at 3.5% to 3.75%, contrary to President Trump's stated wish. However, two Fed officials voted for a cut, including the former head of the Council of Economic Advisors, Stephen Miran, and Christopher Waller - another Trump appointee.

Given that much of Powell's press conference involved a defence of central bank independence, and the dangers of anything that reduces its credibility, it would be interesting to know how the two Trump appointees are viewed by the rest of the Federal Reserve's board.

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January 27, 6:49 AM

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From www.bbc.co.uk - January 26, 7:05 PM

Graham Watson's insight:

And this is one of the reasons why a trade deal with India might be so beneficial: India is a leading player in the tech sector, not least in the design of semi-conductors. If it were able to take the next step and manufacture them, it would diversify the global supply chain for this essential factor input as far as the EU's concerned as well as boost Indian growth.

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January 27, 2:20 AM

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From www.bbc.co.uk - January 26, 6:25 PM

Graham Watson's insight:

Instead of the rules-based approach to international trade it seems like we've entered a tantrum-based era, with President Trump raising tariffs on South Korean exports to the US from 15% to 25%, accusing it of not living up to the terms of trade deal agreed last year.

Of course, the President, as ever, is acting as judge, jury and executioner - so there's no hint of authoritarianism about his policymaking or direction of travel at all. And all it does is further increase uncertainty. Now, wouldn't it be intriguing to discover that the Trump family converted a large part of their assets into gold a little over a year ago?

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January 26, 3:27 AM

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From www.theguardian.com - January 25, 7:01 PM

Graham Watson's insight:

This could go anywhere but it seems as though the UK and some of its EU neighbours are on the point of agreeing to build a massive wind power grid in the North Sea that could power up to 143m homes in future, boosting renewable capacity and European energy security.

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January 25, 6:29 AM

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From www.theguardian.com - January 24, 10:00 AM

Graham Watson's insight:

A glut of Chinese steel seems to have flooded global markets to the extent to that the UK is considering imposing a quota on steel imports, and then levying a 25% tariff on imports above that quota. It's a move designed to try and protect UK steel producers in the face of the global steel price falling.

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January 23, 5:01 AM

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K-pop supergroup BTS set to trigger US economic boom with tour: ‘Every stop is going to see a boost’ | Business | The Guardian | International Economics: IB Economics | Scoop.it

From www.theguardian.com - January 22, 6:00 AM

Graham Watson's insight:

I love unusual examples, and this is one such: the multiplier effect made clear.

The upcoming 79 show tour of K-pop supergroup, BTS, is going to boost regional growth in those cities hosting it to a remarkable degree. According to a 2024 Bread Financial survey "Non-local attenders spend about 3.4 times their ticket cost on traveling and tourism expenses in the local economy." However, many think that the popularity of the Korean band is such that the multiplier effect associated with them is going to exceed that, dwarfing the impact that Taylor Swift.

Equally, Koreans also see the group as encouraging the consumption of Korean exports: according to the article "Last year, the US imported more than $2bn in Korean beauty products, up 34% from 2024"

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January 22, 7:43 AM

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From www.bbc.co.uk - January 21, 7:00 PM

Graham Watson's insight:

This article highlights those things that give an economy a competitive advantage - if not a comparative advantage - in the production of a specific product, in this case - cars. Slovakia produces the highest number of cars per capita of anywhere in the world with Volkswagen and Stellantis (formerly Peugeot-Citroen, Fiat and Chrysler), as well as Kia among the manufacturers with plants there.

Slovakia is an attractive place for manufacturers for all sorts of reasons: access to the EU market, the high productivity of the workers, and their low wages, the economies of agglomeration that have arisen in the supply chain and the incentives that the government initially offered to attract manufacturers in the first place.

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January 21, 12:55 PM

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From www.theguardian.com - January 20, 7:01 PM

Graham Watson's insight:

And the Guardian notes that in the event of a trade war between the EU and the US, there's a potential lever that the US might choose to use to coerce EU agreement. Liquified natural gas (LNG).

It seems that the war in Ukraine has seen many EU countries swap Russian LNG for US-produced LNG, such that "US LNG now accounted for 59% of LNG imports to the EU, according to gas flows data from December."

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International Economics: IB Economics

As US influence wanes, the Chinese trade surplus strangles manufacturing across the globe | US economy | The Guardian

Will corporate America finally stand up to the Trump administration? | US politics | The Guardian

Who is Kevin Warsh, Trump's pick for Fed chair?

Trump threatens tariffs on countries selling oil to Cuba

US leads record global surge in gas-fired power driven by AI demands, with big costs for the climate | Greenhouse gas emissions | The Guardian

US dollar sinks to its lowest level in four years | Dollar | The Guardian

Trade deal: India and EU announce FTA amid Trump tariff tensions

Canada has no intention of pursuing free trade with China, says Carney | Canada | The Guardian

Is the supreme court ready to stand up to Trump over Federal Reserve attack? | Federal Reserve | The Guardian

Trump threatens Canada with 100% tariffs if it 'makes a deal with China'

Trump’s bold economic promises on the campaign trail have led to a policy salad | US economy | The Guardian

The ‘rules-based order’ Davos craves has bigger problems than Trump: it represents a world that no longer exists | Larry Elliott | The Guardian

EU suspends approval of US trade deal

US, UK, EU, Australia and more to meet to discuss critical minerals alliance | Mining | The Guardian

Kevin Warsh: Will Trump's pick to head US central bank get him what he wants?

Why the US dollar hit a four-year low and could fall further

Venezuelan MPs approve bill to open up oil sector to private firms

US Fed holds interest rates and defends central bank independence

Can India be a player in the computer chip industry?

Trump raises US tariffs on South Korea imports to 25%

UK among 10 countries to build 100GW wind power grid in North Sea | Wind power | The Guardian

UK expected to reduce amount of steel it allows in tariff-free | Steel industry | The Guardian

K-pop supergroup BTS set to trigger US economic boom with tour: ‘Every stop is going to see a boost’ | Business | The Guardian

How tiny Slovakia became a car making heavyweight

Trump has growing stranglehold over EU and UK energy supply, study shows | Europe | The Guardian