Archive

April 03, 2025
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US Tariff Impact Estimates

  • New US tariffs ignored any notion of reciprocity, reaching shockingly substantial sizes. However, the UK was relatively fortunate in landing on the 10% minimum rate.
  • Repeating 2024’s imports would raise $577bn in tariff revenue, which is worth ~3% of consumption. 70% pass-through to prices would add 2% to the level over 1-2 years.
  • Negotiations need to conclude rapidly to avoid these front-loaded price rises. The EU’s likely retaliations would magnify its pain, but the US is the biggest stagflationary loser.

By Philip Rush

March 27, 2025
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US Tariffs: No Fooling!

  • The announcement of individual reciprocal tariff rates for US trading patterns on 2 April is rightly seen as a watershed moment for investors. Nevertheless, in a drive to re-industrialise America, it may well prove to be no more than the end of the beginning in a protracted trade war.

By Alastair Newton

March 13, 2025
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Heavy Metal Trade War

  • Volatility in US trade policy continues a cleaner tightening trend against China in the well-established tech war. Tariffs are a tool, but so are export restrictions.
  • China expanded restrictions on rare earth mineral exports to license critical materials like tungsten. The West lacks friendly suppliers and struggles to develop alternatives.
  • European defence investments may flounder. Japan and Korea may also suffer, so they can indirectly frustrate the US. Aggressive trade policy hits volumes as well as prices.

By Philip Rush

January 29, 2025
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AI: Attack Of The Clones

  • AI investors were shocked by China’s DeepSeek successfully matching the performance of OpenAI’s GP4-o1 at a fraction of the build cost and despite export restrictions.
  • Innovating a more productive use of capital does not negate the potential gains from increasing processing power. Either way benefits the economy with faster AI progress.
  • Foundation model IP needs better protection against the attack of cloning distillation techniques to reap a return on investment while pushing the performance frontier.

By Philip Rush

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