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I explain today why the Single market is broken: mutual recognition is not what we think it is; harmonisation actually fragments, and the Commission is not doing its core job. If you only ever read one post, let it be this one siliconcontinent.com/p/the-myth-of-…

Timothy Peterson yup, US struck tech oil (and actual oil with the shale boom)

Trump schenkt gerade 🇩🇪 Geld Wie? Seine erratische Politik führt dazu, dass Interesse nach 🇩🇪 Staatsanleihen steigt Die 🇩🇪 Verschuldung könnte preisgünstiger werden 🔴 Exklusive Zahlen: ⁦Dezernat Zukunft @dezernatzukunft.bsky.social⁩ ⁦Sander Tordoir⁩ ⁦⁦DWS Group⁩ thepioneer.de/originals/othe…

Lots of signs that the trade negotiations with US allies aren't going especially smoothly (the Japanese signaled through the FT that any deal was unlikely before their elections). This shouldn't be a surprise -- the Trump "offer" isn't particularly appealing 1/

To revive Germany’s ailing economy, new chancellor Friedrich Merz faces a baffling paradox: employment is at record highs but individually, Germans have never worked less. on.ft.com/43CIwAM

Religious language - remainers giving the silverware to the EU to atone for sin of Brexit and all - aside. The EU is the far larger economic and trading bloc: it will always have the ‘upper hand’. The UK as the small economy will always reap the most benefits from integration.

My new piece in the New York Times is an urgent wake-up call. China is forging ahead on the industries of the future: AI, robotics, high-tech manufacturing. Meanwhile, Trump is destroying the pillars of US strength by slashing public R&D funding and scaring away foreign talent.

There is definitely some decay, across various dimensions, of the dollar system

"In 2024, German firms invested €5.7 billion in China, accounting for 45% of all foreign direct investment into China from the EU & the UK." "The automotive sector alone made up €4.2 billion, with its share of total German FDI in China rising from 56% in 2023 to 73% in 2024."

In the 20th century, U.S. shipbuilding was unparalleled. Electric Boat Co.'s stock soared 55,000% from 1932–1954. Today, the industry struggles, overshadowed by China but also Japan, S-Korea, EU. A stark reminder of industrial decline both Biden and Trump strive(d) to reverse.

Very much agree. Kyle's work is indispensable and I always learn a lot from him.

An extremely good summary of yesterday’s reset deal

Dollar leaking again (in price action that smells a bit like April: long bond down, equities down, dollar down) Asian and European g10 currencies outperforming in the move...

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Words fail me. What Brad Setser Sander Tordoir and Noah Gordon said. Plus a gentle reminder that bashing the Biden Admin *seemed* cost-free.

That’s absolutely right. The inflation reduction act created demand for European clean tech makers. It’s repeal will be bad for Europe. If Europe manages to offset the lost demand with industrial policy it may come out stronger in the long run when the US changes tack again.

Neuer, heftiger Trump-Zoll-Hammer gegen die EU: Er droht mit 50 Prozent Zoll ab 1. Juni. Natürlich Verhandlungstaktik, aber gefährlich für Deutschland. Hintergrund: Die EU will nicht einseitig ihre Zölle senken, sondern drängt auch auf Abbau von US-Barrieren (gibt es genug).

The single most reliable economic fact of the Trump presidency is that when he raises tariffs, markets tank. When he backs off, they rise. This matters because markets are assessing the future profitability of American business and any tariffs benefits are downstream of boosting

I’d say my trajectory has been the exact opposite. I used to not grasp why economists tended to be sanguine about trade deficits. To me what was helpful is understanding that the surplus country is burdened with the real cost of time and resources.

The initial calm response of the EU to reciprocal tariffs seemed right: minimise economic damage and try to negotiate. But team Trump has unreasonable demands: the EU should now retaliate hard in order to have something on the table the bloc can actually negotiate down.