Rachel Ziemba
@reziemba
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Macro geopol esp EM @horizonengage @cnasdc teaching @nyucga. Obsessed by energy, sanctions, sovereign wealth, debt, trade 🇨🇦 🇺🇸🍷 econ
NYC/YVR
Joined January 2009
Liquor exports held up better- somewhat puzzlingly stable, with value of exports holding up glohally and recovering from 2024 drops (response to glut). Unlike beer and wine, hard liquor exports from US to Canada are relatively stable. Will have to look into why.
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Beer exports are also down but it seems like mostly a decline following some front-loading of trade, perhaps to Europe and Asia, and values are not out of range. US imports of beer, which predominately come from Mexico increased as producers navigated new rules.
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India continies to follow dual track of negotiating trade/economic agreement with US and lodging complaints at WTO especially for auto tariffs.
INDIA PROPOSES RETALIATORY DUTIES AT WTO AGAINST U.S. TARIFF ON AUTO PARTS - STATEMENT . INDIA SAYS 25% IMPORT TARIFF ON VEHICLES, SOME AUTO PARTS BY U.S. AMOUNTS TO SAFEGUARD MEASURES - STATEMENT. INDIA RESERVES RIGHT TO SUSPEND CONCESSIONS, OTHER OBLIGATIONS EQUIVALENT TO.
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US wine exports remain at epicentre of trade war. Exports are down over 30% y/y in value for Feb-May 2025, mostly due to Canada effective import ban which dropped sales by close to 90%: But sales to Chinese, Japanese and EZ rose in May, most at highest value in 2 yrs.
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These designations of tankers are likely another shot across the bow and trying to send message to both Iran and Iraqi officials. This smuggling trade has been alleged for some time but volumes have been murky. Hard to see this enforcement having much impact on volumes delivered
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More sanctions on Iran energy -this time on an alleged smuggling network linked to Iraq, where Iranian oil is reportedly shipped out as Iraqi oil. This has been talked about for some time as a possible target. A singapore service provider also targeted.
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A bunch of new Qs on tariffs including whether tariffs would impact well drilling- result was ambiguous though small firms even more worried. This tracks given lower economies of scale.
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The great Dallas Fed survey highlights why drill baby drill isnt happening. Activity fell, esp output for oil +gas, outlook uncertainty way up (4ppts), input costs up for oil services (tho eased for E&P). Even with a drifting higher oil price expectation.
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Overall, this just means more macro volatility, a lot of challenges complying, and continued foggy conditions as underlying demand hard to measure.
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china is offering Cognac producers lower tariffs if they cooperate in investigations and set a minimum price- and implicitly if European leaders adjust EV tariffs. Cognac sales to china are down 40% y/y following tariffs, more than China demand decline.
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We will clearly see a lot of trade headlines in the coming weeks, preliminary “deals”, stalled talks, and the like. The situation will be complex for those in trade especially as there are still sectoral tariffs both existing and pending.
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Plus of course highlights that 10% baseline tariff not deemed enough for country that has a big and growing trade surplus with the US.
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This is first US attempt to put a different tariff on transshipped products. But presume there is a lot of enforcement challenges. With China to Vietnam shipments up, both for transshipment and for ongoing supply chain shifts, something to watch.
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Not many details but most interesting part of US-Vietnam deal is the 40% on trans-shipped products vs 20% on goods from Vietnam. Will be curious to see how Rules of orgin defined - how much Vietnamese content. And yes, hard to see Vietnam interested in US big cars.
Well, a few details -- Vietnam is accepting a tariff well above the "base" tariff. The US doesn't export much to Vietnam as it is -- and I rather doubt there is a lot of demand for big US SUVs in a poor country, but let's see.
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Although EU/UK +friends have been targeting shadow fleet and trying to close loopholes their sanctions are much less extraterritorial in effect. small Risk-tolerant entities in third countries are again moving into gap. Trade not easy but continuing.
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A signpost Im watching is summer shipments from Arctic LNG2. We are now in window where Russia’s lack of icebreaker LNG vessels is not a physical constraint tho will cargos be discounted enough for buyers to bite?. Project still sanctioned but hard to see trump admin acting.
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Nice summary of ongoing erosion of sanctions enforcement/divergence ->creation of new illicit channels. great comments from @elinaribakova @edwardfishman @zakavkaza .Makes it easier for Russia to spend funds but weaker fuel prices hitting revenue.
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See below on supply demand mismatches of us production vs consumption.
The US largely produces very light crude but it refines a heavier average barrel. Therefore the bulk of US crude imports are heavier grades to blend with those lighter domestic shale barrels. And guess who exports largely heavy crude, virtually all of which ends up stateside?. 🇨🇦
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Two problems with this messaging, one the blend - US production blends arent aligned with refinery needs as highlighted today by @Rory_Johnston below. - at these price points there won’t be much drill baby drill, especially with infra imput cost uncertainty from tariffs.
We don’t need foreign oil—we’ve got Texas, Alaska, the Gulf, and the whole country. DRILL, BABY, DRILL.
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