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@Brad_Setser Avatar @Brad_Setser Brad Setser

Argentina is facing significant economic challenges, including a large capital flight and dwindling foreign exchange reserves, which has led to intervention in the currency market to keep the peso stable. The country's finance minister has been selling reserves and has reportedly borrowed from the domestic banks, deposit insurance system, and the IMF. The US has provided a credit line to Argentina through the Exchange Stabilization Fund, which has been used to buy pesos and stabilize the currency.

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Social category influence finance #1038 countries XXXX% currencies #1700 stocks XXXX% technology brands XXXX% travel destinations XXXX% automotive brands XXXX% cryptocurrencies XXXX%

Social topic influence china #572, argentina #1462, tariffs #74, rare earth #26, gdp #6, currency #540, debt #937, investment #2486, has been #2161, germany #1474

Top accounts mentioned or mentioned by @joequant @glennluk @robinjbrooks @bauhiniacapital @robin_j_brooks @tylermacro10 @marcmakingsense @vandadghiassi @tmtlongshort @macropotamus @jonsindreu @imfnews @iamarcivanov @andresdrobny @thematicmarkets @dineshranbhise @pstasiatech @goodtaxtakes @zeitgeistexplo1 @briangobosox

Top assets mentioned Spotify Technology (SPOT) New York Times Co. (NYT)

Top Social Posts #

Top posts by engagements in the last XX hours

"@BaldwinRE Good point. But there just hasn't been the usual USD/ import price correlation since the pandemic (series break is end 2020 more or less). I am confused -- maybe the big minds in academia can sort it all out"
X Link @Brad_Setser 2025-10-08T06:59Z 139K followers, 1529 engagements

"@pstAsiatech and any specifics here on the concession -- "semiconductor manufacturing equipment" (is this code of letting China buy the best Dutch kit or is there something more incremental you have in mind)"
X Link @Brad_Setser 2025-10-12T20:28Z 139K followers, XXX engagements

"The IMF's chart starts in 2024 -- a chart that goes back to say end 2021 would show a much bigger real depreciation of the yuan. That's a big reason why China's trade surplus is so big (and why the 2025 surplus will far exceed the IMF's forecast) 2/4"
X Link @Brad_Setser 2025-10-08T20:01Z 138.9K followers, 5086 engagements

"And rare earth magnets are even more important to EVs ("used to turn the wheels") . 2/"
X Link @Brad_Setser 2025-10-12T19:45Z 139K followers, 3500 engagements

"Building out capacity (including refining capacity) for rare earths/ other critical minerals should indeed by a real priority now and the risk of weaponization of this this and other supply chains should have been taken more seriously in the past. But it won't be easy 1/"
X Link @Brad_Setser 2025-10-11T21:36Z 139K followers, 161.3K engagements

"That though ran into a problem -- rare earth prices tanked (rare earths aren't that rare and all the bottleneck is refining and China actually has plenty of capacity) 10/"
X Link @Brad_Setser 2025-10-11T21:47Z 139K followers, 5390 engagements

"@rainwangjoy and we know Chinese direct exports to the US are way down and that there is a lot of indirect exports through Taiwan and SE Asia "
X Link @Brad_Setser 2025-10-13T05:12Z 139K followers, XXX engagements

"Great story Lots of lessons to be learned"
X Link @Brad_Setser 2025-10-13T02:44Z 139K followers, 24.2K engagements

"I don't think it should be a surprise that an equity sell off weakens the dollar -- but that isn't what is in a lot of big risk models which assume based on past correlations that the dollar rises when equities fall providing a bit of a hedge for dollar equities "
X Link @Brad_Setser 2025-10-12T17:53Z 139K followers, 7228 engagements

"yet more background "
X Link @Brad_Setser 2025-10-11T22:08Z 139K followers, 12K engagements

"@IMFNews But the truly indefensible forecast is the forecast for China. A XX% RER depreciation should raise the trade surplus by XXX pp of GDP and the impulse from the RER move of the last few years is in now way over (the RER move is also bigger than 10%) 8/"
X Link @Brad_Setser 2025-10-14T17:38Z 139K followers, 2721 engagements

"Obviously something is wrong -- and the fall in reserves (After netting out the April IMF loan) actually preceded the Buenos Aires election. It isn't just a question of politics"
X Link @Brad_Setser 2025-10-09T21:27Z 139K followers, 12.9K engagements

"China -- per the excellent reporting on the WSJ/ @Lingling_Wei -- appears to be pursuing a strategy of applying maximum pressure in pursuit of maximum concessions . full tariff rollback rollback of export controls relaxation of nat'l security review on Chinese investment 1/"
X Link @Brad_Setser 2025-10-10T16:48Z 139K followers, 270.6K engagements

"@realKunalAShah US current account deficit hasn't shrunk nor has the US goods deficit . we absorb the surplus still just more indirectly :)"
X Link @Brad_Setser 2025-10-14T20:05Z 139K followers, XXX engagements

"note I said a few provocative things in here (notably about the lack of US attention to China's exchange rate management . ) They sound different today than they did last week b/c this was recorded before the XXX% tariff threat"
X Link @Brad_Setser 2025-10-13T18:12Z 139K followers, 7287 engagements

"p.s. Economic theory yields an ambiguous result here -- tariffs tend to lower the level of trade not the trade balance. but that changes if the tariffs trigger a big currency move/ changes in financial flows -- or if they are used a mechanism for fiscal adjustment. cc @marthagimbel 7/7"
X Link @Brad_Setser 2025-10-02T22:57Z 138.9K followers, 5821 engagements

"@IMFNews And it defies belief that a country with a manufacturing surplus of over XX% of GDP a (customs goods and services balance) of X% of GDP and a positive and growing net int. investment position is heaving toward a current account surplus of only X% of GDP . 9/"
X Link @Brad_Setser 2025-10-14T17:40Z 139K followers, 2829 engagements

"Not sure though what China has done other than trade in schemes which tend to pull forward demand. I certainly hope the IMF doesn't think China has done enough . and the IMF elsewhere notes that China fiscal support will fade ("In China the deficit is expected to narrow slightly through 2030 following a widening of XXX percentage points in 2025") 4/"
X Link @Brad_Setser 2025-10-14T17:28Z 139K followers, 2378 engagements

"Equally superb reporting -- with another set of lessons to be learned. my fear is that GM is head of many defense contractors in reducing its vulnerability . hope that is off"
X Link @Brad_Setser 2025-10-13T02:47Z 139K followers, 9521 engagements

"The euro zone is a system where export driven economies like Germany link their currencies to a broader economic block and thus avoid a shock that would price German auto and machinery exports out of global markets absent massive fx intervention by the Buba"
X Link @Brad_Setser 2025-10-05T18:05Z 139K followers, 83.2K engagements

""Donald Trump has said he will impose additional tariffs of XXX per cent on China . The new measures would be imposed from November X or sooner""
X Link @Brad_Setser 2025-10-10T21:38Z 139K followers, 12.4K engagements

"Wow. And what the . "To that end today we directly purchased Argentine pesos" Not the best use of ESF funds ESF= Argentine Stabilization Fund"
X Link @Brad_Setser 2025-10-09T18:48Z 138.9K followers, 46.4K engagements

"And part of the problem was the hope that commercial firms burned by the supply chain snarls of the pandemic would do the investment largely on their own . 9/"
X Link @Brad_Setser 2025-10-11T21:45Z 139K followers, 5200 engagements

"Japan has attracted a bit of attention after the LDP's leadership election -- yen down stocks up long-term JGB yields up Two observations -- one is that the increase in JGB yields over the last 12ms hasn't had much of any impact on US yields. At least not for the 10y 1/"
X Link @Brad_Setser 2025-10-06T21:14Z 139K followers, 64.3K engagements

"The US which is notoriously bad at coordinating its China policy across agencies is now saying the same applies to China: "The hardliners are the Ministry of Commerce and the Ministry of State Security and the MSS has taken a much greater role in the economy 3/"
X Link @Brad_Setser 2025-10-14T05:17Z 139K followers, 5462 engagements

"@IMFNews As it is XXX% clear that in the real world (as opposed to the statistical mirage created by the intersection between the MIF's new "transfer of value" BoP methodology and China's statistical reporting the issue is China's soaring surplus 11/"
X Link @Brad_Setser 2025-10-14T17:47Z 139K followers, 5945 engagements

"@macropotamus didn't POTUS XX already TACO on the XXX% with his don't worry tweet but hey who knows and who knows what stacks and what doesn't "
X Link @Brad_Setser 2025-10-14T21:33Z 139K followers, XXX engagements

"The IMF needs to take a serious look at its methodology for forecasting the current account balance in key countries -- the current approach is yielding somewhat absurd outcomes that forecast real problems (notably China's surplus) away 1/"
X Link @Brad_Setser 2025-10-14T17:20Z 139K followers, 27.5K engagements

"my colleague (and friend) @RushDoshi thinks that the US will have to cross retaliate with financial sanctions to level the negotiating table -- that implies a serious escalation 9/"
X Link @Brad_Setser 2025-10-10T17:00Z 139K followers, 40K engagements

"The logic of using the SDRs (The Treasury technically borrows dollars from the Fed using SDR certificates as collateral) is simple: the ESF has $173b of SDRs and only $23b of dollars . 2/"
X Link @Brad_Setser 2025-10-09T18:03Z 139K followers, 6138 engagements

"Some thoughts on this very question from April"
X Link @Brad_Setser 2025-10-12T17:49Z 139K followers, 24K engagements

"Why a strange stabilization -- because the monthly data shows a big jump in imports not the expected weakness in exports . and that is at odds with other signs of weak internal demand in China 2/"
X Link @Brad_Setser 2025-10-13T04:47Z 139K followers, 2842 engagements

"so it isn't obvious that the recent string of lower deficits than in the spring is actually evidence of real adjustment or just the reversal of some front running (think it is more a reversal of front running for now) 6/"
X Link @Brad_Setser 2025-10-02T22:55Z 138.9K followers, 6186 engagements

"And no one feels like they are losing a trade way when their export volumes are up XX% in pretty much every measure (Chinese export volume growth his still 3x global trade volumes) 11/"
X Link @Brad_Setser 2025-10-13T05:04Z 139K followers, 3572 engagements

"And some more recent thoughts - in a world where the marginal inflow that sustains the X% of GDP US current account deficit is increasingly coming from return seeking equity flows "
X Link @Brad_Setser 2025-10-12T17:52Z 139K followers, 8189 engagements

"A podcast recorded last week -- before the blow up over China's expanded set of export controls (and the threat of XXX% tariffs that we either are or aren't supposed to worry about .)"
X Link @Brad_Setser 2025-10-13T18:09Z 139K followers, 35.9K engagements

"Good chart from the IMF (in Georgieva's curtain raiser) showing that the story of 2025 has been the deprecation of the Chinese yuan not the depreciation of the dollar (the dollar is back where it was in 2024 China is much weaker) 1/4"
X Link @Brad_Setser 2025-10-08T20:00Z 139K followers, 45.4K engagements

"There are rumors -- based on material reported in the Argentine press -- that suggest the US lifeline to Argentina will be funded using Special Drawing Right certificates and that the BCRA will on lend some funds to the MoF to do bond buybacks . 1/"
X Link @Brad_Setser 2025-10-09T18:01Z 139K followers, 52.7K engagements

"Nice piece from Mark Sobel. I very much hope there is more depth to the US approach than simply providing $20b of unconditional support for the current Argentine exchange rate rate regime + a few direct peso purchases"
X Link @Brad_Setser 2025-10-14T17:06Z 139K followers, 14.1K engagements

"Backing Argentina's existing exchange rate framework/ band will prove to be a mistake Bessent: "Argentina's exchange rate band remains fit for purpose." cc. @sobel_mark"
X Link @Brad_Setser 2025-10-09T18:50Z 139K followers, 47.1K engagements

"@tphuang what did i get wrong and why should i consider your views were to be those of an expert out of curiousity (i also included a lot of links -- which ones are off)"
X Link @Brad_Setser 2025-10-11T22:13Z 138.9K followers, 1813 engagements

"The ESF has some FX & it could lend SDRs to Argentina (or convert them at the Fed there are always options) but $30b in a huge sum to Make the Argentine Peso Great Again 2/2"
X Link @Brad_Setser 2025-09-20T23:50Z 139K followers, 18.3K engagements

"Definitely not escalatory . (serious point is that this tweet and some of the material in the WSJ story suggest that the US is now trying to be a bit more targeted in its efforts to generate economic leverage v China)"
X Link @Brad_Setser 2025-10-14T19:50Z 139K followers, 8773 engagements

"Useful points from Mr. Harrell. I am somewhat less optimistic about "innovation" as the US bias towards projects with potentially big returns sometimes gets it the way of actually going things using proven technology that offer more modest returns "
X Link @Brad_Setser 2025-10-12T17:29Z 139K followers, 45K engagements

"But the big omitted variable in the @IMFNews analysis (other than high frequency data that shows the customs goods and services surplus on track to top $X trillion this year) is the real exchange rate . 4/"
X Link @Brad_Setser 2025-10-14T17:29Z 139K followers, 2503 engagements

"Sino American economic relations have gotten testy. Bessent is arguing that China's export controls are a sign of weakness: "This is a sign of how weak their economy is and they want to pull everybody else down with them." & the talks this summer weren't easy"
X Link @Brad_Setser 2025-10-14T05:12Z 139K followers, 70.5K engagements

"@pstAsiatech I actually am among those who recognize that getting US industry and allied industry to do this is hard (no $$$ typically) and part of the challenge is indeed the lack of an experienced workforce/ possibly a shortage of chem engineers"
X Link @Brad_Setser 2025-10-12T19:55Z 139K followers, XXX engagements

"I am glad that both Secretary Bessent and the MD have recognized that Argentina's reserves are in fact a critical issue (it isn't a focus of the MAC-DSA . ) But there is a need for brutal truth telling here. All of Argentina's remaining usable reserves are borrowed 2/2"
X Link @Brad_Setser 2025-10-10T03:49Z 138.9K followers, 10.1K engagements

"Bessent -- The Argentine peso is undervalued . 1/2"
X Link @Brad_Setser 2025-10-10T03:02Z 139K followers, 48.5K engagements

"The IMF needs to do a better job of preserving its credibility here. Argentina's economic program has manifestly NOT facilitated reserve accumulation. The board had to grant Argentina a waiver on its net reserves target back in August 1/2"
X Link @Brad_Setser 2025-10-10T03:46Z 139K followers, 33.8K engagements

"It is well known in sovereign debt circles (but not among the foreign policy world) that the amortization structures on Chinese policy bank loans are super steep and that China has taken big $$$ off the table between XX and XX . 2/"
X Link @Brad_Setser 2025-10-08T04:22Z 138.8K followers, 6854 engagements

"@SimonJohnBowden yes. See Brender and Pisani. Or Betaut Demarco Kamin and Tryon"
X Link @Brad_Setser 2025-10-04T20:50Z 138.9K followers, XXX engagements

"The only big of good news -- for rare earths and for that matter active pharma ingredients/ key precursors -- is that the actual capital costs aren't huge. 10s of billions may low 100s of billions would make a big difference (contrast with the AI buildout) 14/"
X Link @Brad_Setser 2025-10-11T21:52Z 139K followers, 6018 engagements

"The Biden Administration did a series of reports -- including a strong one on critical minerals/ rare earths - highlighting supply chain weakness that needed to be addressed post pandemic . 7/"
X Link @Brad_Setser 2025-10-11T21:43Z 139K followers, 5493 engagements

"@pstAsiatech what industry has taken a huge hit since 2022 the chip industry not seeing that in their stock prices :) . someone else may see a big hit now that China responds with its own export controls but not quite seeing the massive harm post XX that you assert"
X Link @Brad_Setser 2025-10-12T20:20Z 139K followers, XXX engagements

"@pstAsiatech thanks -- didnt see any documentation of "huge" costs to US chip sector (Nvidia is doing just fine AM is a Singaporean company judging from its tax structure these days but seems to be doing fine). Asserted harm nothing demonstrated. Open to seeing data/ details"
X Link @Brad_Setser 2025-10-12T20:27Z 139K followers, XXX engagements

"@sobel_mark There is cheerleading & then there is cheerleading -- this cheerleading has been so effective that it has convinced me that the Treasury and Caputo do not believe that any further exchange rate adjustment is needed & that in their preferred scenario nothing much changes on Oct 27"
X Link @Brad_Setser 2025-10-10T20:56Z 138.9K followers, 1047 engagements

"So we are returning to a world where seats are adjusted manually without a level (absent magnet export licenses from China) 1/"
X Link @Brad_Setser 2025-10-12T19:43Z 139K followers, 18.5K engagements

"Some crazy numbers floating around right now . Mostly in Argentina (the Exchange Stabilization Fund only has $22b in liquid USD securities) 1/2"
X Link @Brad_Setser 2025-09-20T23:31Z 139K followers, 111.5K engagements

"Useful comment from EM veteran Mark Dow -- I of course believe that the pressure on the peso inside the band ultimately stems from a peso that is too strong for an Argentine economy that struggles to generate a foreign exchange surplus to pay external debt/ rebuild reserves"
X Link @Brad_Setser 2025-09-24T14:34Z 139K followers, 32.6K engagements

"And there will be an impact on Ukraine: "Among the items banned are the small yet powerful electric motors in missiles and fighter jets and the materials for crucial range finders in tanks and artillery that are used to zero in on distant targets" 3/"
X Link @Brad_Setser 2025-10-12T19:46Z 139K followers, 4039 engagements

"Lots of interesting tidbits here -- not sure China is technically in a recession but agree with Bessent that China has been trying to export its way out of domestic trouble 2/"
X Link @Brad_Setser 2025-10-14T05:15Z 139K followers, 10.8K engagements

"The US -- not just the Trump Administration -- lost leverage when President Trump over-escalated in April. The US could not sustain XXX% tariffs and more or less had to unilaterally back down. Xi and his team know that 1/"
X Link @Brad_Setser 2025-10-15T05:12Z 139K followers, 1235 engagements

"For what it is worth I believe the maturing $2b bond should have been reprofiled -- along with the Exim loan -- back in XX or XX . but the remaining bond holders currently have no incentive to restructure their current terms. I applaud the Exim restructuring and would likely applaud it more if I know the actual terms. But I do think it came 2-3 years too late and would like to know the spread over the CNY floating rate benchmark and the new amortization schedule"
X Link @Brad_Setser 2025-10-09T03:09Z 138.9K followers, XXX engagements

"@pstAsiatech So then what is your propose deal and what are the real nat'l sec concerns you would protect v the manufactured ones you would give up -- I found your piece excellent it its description of the uses of rare earths but vague in the nature of the deal you favor"
X Link @Brad_Setser 2025-10-12T20:50Z 139K followers, XXX engagements

"Bloomberg buried the lede here The real story isn't that Kenya is saving 200m in debt service costs by restructuring into CNY -- It is that China has already gotten $XXX b of the principal on the original railway loan back 1/"
X Link @Brad_Setser 2025-10-08T04:20Z 139K followers, 38.2K engagements

"(ironically losing the IEEPA Supreme Court case would allow for a reset -- most of the tariffs on allies would go away the legacy XXX on China remains and could easily be adjusted up and the sectoral 232s could be modulated a bit more)"
X Link @Brad_Setser 2025-10-13T01:44Z 139K followers, 10.1K engagements

"@BobP1A1 Tis true they aren't that rare. But refining capacity outside China is scarce and the capital and equipment needed to refine the output of non-Chinese mines won't magically appear overnight. your comment is accurate but relevant for the long-term"
X Link @Brad_Setser 2025-10-12T19:49Z 139K followers, XXX engagements

"@andresdrobny I am also a bit surprised. Guess the incoming PM has criticized an earlier rate hike so the assumption now is that the BoJ will be accomodative "
X Link @Brad_Setser 2025-10-06T21:46Z 138.8K followers, 1659 engagements

"@YanLian31677392 The quibble is that China got $1.5b back at a time when Kenya was under a bit of distress and thus the restructuring into CNY came a bit late . (& why aren't the terms of restructured loan transparently disclosed I suspect it is better than LBIRO + XXX but want to know)"
X Link @Brad_Setser 2025-10-09T02:56Z 139K followers, XXX engagements

"The corollary is that higher Japanese rates (long-term nominal rates that is real rates are a bit different) haven't pulled Japanese funds back home. This is a lagged chart -- but it shows how stable Japanese (private) fixed income portfolios have been after XX . 3/"
X Link @Brad_Setser 2025-10-06T21:19Z 139K followers, 4052 engagements

"I am not a big fan of the Trump administration's focus on attracting big foreign investment deals -- tis risky to outsource industrial policy to commercial rivals and if the pledges are real the pledges assure a continued unbalanced trade relationship 1/"
X Link @Brad_Setser 2025-10-03T16:38Z 138.9K followers, 16.2K engagements

"@RushDoshi p.s. anything by @KeithBradsher on China's control over rare earths is worth reading closely. China clearly decided to show its full hand yesterday; it thinks it has the high cards"
X Link @Brad_Setser 2025-10-10T17:14Z 139K followers, 280.4K engagements

"@pstAsiatech Paul -- I don't remember you advocating for policies to reduce dependence on China's electronic or rare earth supply chain in the past (think you argued that the US should embrace Chinese firms as partners) so your criticism falls a bit flat"
X Link @Brad_Setser 2025-10-12T19:54Z 139K followers, XXX engagements

"Germany has absolutely gotten clobbered by the second China shock (the Russian gas shock/ phasing out Nuclear also didn't help) 1/"
X Link @Brad_Setser 2025-10-08T18:29Z 139K followers, 215.9K engagements

"I obviously agree with Gourinchas -- In reality China's current account surplus is 4-5% of GDP (China underreports it) and it is poised to rise further on the back of this year's real depreciation 2/"
X Link @Brad_Setser 2025-10-14T19:10Z 139K followers, 6839 engagements

"And as a reasonably well informed observer of the press game I love how China uses the WSJ to talk the US down just after the US uses the FT to talk China down . 4/"
X Link @Brad_Setser 2025-10-15T05:19Z 139K followers, XX engagements

"I was expecting the Trump administration to take a much more active interest in Asian fx issues than has been the case to date -- after all Asian currencies are weak when Asia's surplus is big and there is good empirical evidence linking currency weakness to surpluses 7/"
X Link @Brad_Setser 2025-10-03T03:38Z 139K followers, 2381 engagements

"The IMF's "flagship" market access debt sustainability assessment -- inexplicably -- ignores the balance of payments. Bond investors don't have that luxury "
X Link @Brad_Setser 2025-09-18T16:59Z 138.9K followers, 33.3K engagements

"I think this is indeed China's core ask along with adjusting the export controls . But it creates a big problem for the US tariff structure -- the Trump X tariffs on China would fall to XX% below SE Asia (19-20%) Europe (15%) and Japan/ Korea (15%) 1/2"
X Link @Brad_Setser 2025-10-13T01:41Z 139K followers, 69.2K engagements

"@donwinslow really good question one I would like to see Secretary Bessent answer. and I don't think arguing that it is just b/c of the risk the opposition may win the legislative election cuts it; Argentina was losing reserves all year"
X Link @Brad_Setser 2025-10-11T22:22Z 138.9K followers, 8000 engagements

"@SanderTordoir Germany has ample fiscal space -- and its industrial sector is facing a bit of a crisis. It is time to make creative use of that fiscal space to support a domestic demand led recovery . 5/5"
X Link @Brad_Setser 2025-10-08T19:03Z 138.9K followers, 23.5K engagements

"@IMFNews The WEO discusses the impact of the dollar on the US current account -- but not the yuan on China's current account. That gets the analysis backward -- the impulse from the exchange rate is massive for China where the RER is down substantially v its recent levels 5/"
X Link @Brad_Setser 2025-10-14T17:31Z 139K followers, 2567 engagements

"It will be a while before the ESF balance sheet for October is disclosed but I am looking forward to seeing the disclosed ARS (Argentina peso) book :)"
X Link @Brad_Setser 2025-10-09T21:12Z 138.9K followers, 9348 engagements

"I still do assess China's hidden reserves by the way. Knowing what Lingling Wei reports China is thinking and what the Dimi and others report the US is thinking is also important to understanding the current trade war; I can relay their reporting while knowing that they are shaped by their sources as are all journalists. cheers"
X Link @Brad_Setser 2025-10-14T13:38Z 139K followers, XXX engagements

"Nice piece by Alan Beattie on the Argentina problem that Javier Milei hasn't solved -- namely a structural shortage of foreign exchange plus a preference for an overvalued peso 1/3"
X Link @Brad_Setser 2025-10-02T04:18Z 138.8K followers, 16.2K engagements

"MAGA is now "Making the Argentine Peso Great Again" Direct purchases of pesos would be an innovative use of the Exchange Stabilization Fund -- and a risky one. It isn't clear that the peso really can hold inside its current band"
X Link @Brad_Setser 2025-09-22T13:13Z 139K followers, 71.2K engagements

"So from XXX% tariffs on all Chinese trade (in response to the rare earth/ critical mineral export controls) to targeted sanctions on cooking oil"
X Link @Brad_Setser 2025-10-14T19:48Z 139K followers, 58.4K engagements

"Here is a chart showing BCRA fx reserves after adjusting for the influx from the IMF -- they are clearly down this year + $XX billion of the remaining total is Chinese yuan from the PBOC swap line and not really usable"
X Link @Brad_Setser 2025-10-06T23:22Z 139K followers, 45.1K engagements

"I have been focused on China's extraordinary trade surplus recently. But Korea is also posting some big numbers "The monthly Sept trade balance stood at a surplus of $XXXX billion . the biggest since September 2018" 1/"
X Link @Brad_Setser 2025-10-03T03:25Z 139K followers, 29.5K engagements

"100% tariffs -- especially if on top of the current effective tariff rate of XX% -- will force the issue. November isn't far away "
X Link @Brad_Setser 2025-10-10T21:36Z 139K followers, 43.5K engagements

"Saudi Arabia's balance of payments break even oil price is now in the 90s. With oil in the 60s a large current account deficit should now be baked into the calculations of the desert kingdom 1/"
X Link @Brad_Setser 2025-10-01T13:15Z 139K followers, 124.4K engagements

"@RushDoshi The trade war with China neither proved easy or easy to win (China actually went on an export tear and its manufacturing surplus doubled globally after the Trump term X tariffs) -- Supply chain wars will be even harder. The US starts from a weaker position too 10/10"
X Link @Brad_Setser 2025-10-10T17:01Z 139K followers, 32.5K engagements

"Bessent's comments yesterday -- insisting that the ESF swap isn't a bailout and arguing the the peso is a good buy -- made me less inclined to support the Argentine program. They collectively suggest Bessent has misdiagnosed Argentina's problem 3/3"
X Link @Brad_Setser 2025-10-10T20:40Z 139K followers, 13.2K engagements

"Bessent: US Treasury wants to support Argentina's strong policies . The message seems a bit off. Countries with strong policies don't usually need a second bailout in a year. Argentina already blew through $14b from the IMF 1/"
X Link @Brad_Setser 2025-10-06T21:31Z 139K followers, 154.1K engagements

"The US Exchange Stabilization Fund hasn't been used to buy/ sell fx for a long time . Kudos to anyone who predicted its first use in Trump X would be to buy Argentine pesos (and not to buy say yen or won .) inside Argentina's band "
X Link @Brad_Setser 2025-10-09T18:58Z 139K followers, 44.5K engagements

"@kevinziyizhao your example re limited Chinese value added is out of date. BYD cars are almost all Chinese value added. Many other examples. hence massive surplus"
X Link @Brad_Setser 2025-10-12T23:24Z 139K followers, XXX engagements

"I do worry about compounding losses and a new wave of bad debt from directed lending to manufacturing firms I don't worry about selling foreign assets to cover bank losses; the best recap instrument of domestic government bonds; I do worry that China will try to export its way out once again/ even more so"
X Link @Brad_Setser 2025-10-14T19:38Z 139K followers, XXX engagements

"Great reporting from Keith Bradsher of the New York Times; really essential background on what China's new set of export controls could mean 4/4"
X Link @Brad_Setser 2025-10-12T19:47Z 139K followers, 11.7K engagements

"Argentine Finance Minister Caputo: "There are no modifications to the exchange scheme neither now nor post-October 26" He of course cannot say otherwise but adds to my fears that the US isn't asking for changes to Argentina's XR regime attention @sobel_mark"
X Link @Brad_Setser 2025-10-13T02:33Z 139K followers, 27.1K engagements

"@SaraEisen The US is absolutely lending Argentina $20b. ESF's USD account goes down by $20b. it gets a peso account true. But it is XXX% a credit exposure in USD to Argentina. if the ESF needed further cash it would need to sell pesos so to speak (or monetize the SDRs)"
X Link @Brad_Setser 2025-10-08T01:59Z 139K followers, 44.7K engagements

"Quaint concerns by today's standards but it illustrates how far the debate has come. The Biden Administration did put in place tariffs on rare earth magnets (phased in) back in early 2024 but it was a bit of a fight (concerns about raising cost of green transition) 6/"
X Link @Brad_Setser 2025-10-11T21:42Z 139K followers, 11.8K engagements

"@IAmArcIvanov @TheWalrus83 bottleneck is around processing REs and producing the permanent magnets not the rocks -- takes time and capital to built a // set of facilities to do processing and manufacturing"
X Link @Brad_Setser 2025-10-12T20:12Z 139K followers, XX engagements

"And there is no doubt that the + XX% bilateral tariff of Trump X is having a big impact on bilateral trade patterns (see the US v EU divergence in China's exports which is more extreme than in Trump 1) 8/"
X Link @Brad_Setser 2025-10-13T04:59Z 139K followers, 2658 engagements

"Pharmaceuticals from China too (why raise the price of meds . ) For rare earths and magnets there was essentially no US supply so the tariffs just raised costs (absent a plant o build out capacity over time) 4/"
X Link @Brad_Setser 2025-10-11T21:38Z 139K followers, 6576 engagements

"@IMFNews Moreover the Fund expects the US fiscal deficit to widen in 2026 which in the IMF's model should increase the US external deficit by XXX pp of GDP . yet the IMF forecasts a fall in the US current account deficit. Sad 7/"
X Link @Brad_Setser 2025-10-14T17:36Z 139K followers, 2593 engagements

"So I don't see much of a mystery on the export side. The weak (real) CNY is overwhelming the impact of (expected) bilateral tariffs . Import volumes though are a puzzle 12/12"
X Link @Brad_Setser 2025-10-13T05:06Z 139K followers, 9904 engagements

"I continue to be struck that the Treasury is portraying its support for Argentina much more as a reward for Milei's existing policies than as emergency support that allows Milei and team time to correct the weakness that led them to run out of fx "
X Link @Brad_Setser 2025-10-09T21:25Z 139K followers, 69.7K engagements

"@sobel_mark I have supported using the Exchange Stabilization Fund for counter-intervention in the past . but the idea there was to buy undervalued currencies not to buy overvalued currencies. And wonder what instruments the US will buy with its peso stabilization fund "
X Link @Brad_Setser 2025-10-09T18:52Z 138.8K followers, 9417 engagements

"This though is a crazy chart -- there has been an over $200b swing in China's trade balance with the emerging economies in the last 18ms. Massive surplus there now . which maps to a lot of anecdata 9/"
X Link @Brad_Setser 2025-10-13T05:01Z 139K followers, 2702 engagements

"I am a bit old fashioned in some ways. US support should be predicated on a countries' policies (meeting fiscal targets meeting fx reserve targets a sensible exchange rate regime) not the specific outcome of its politics. Not how Trump thinks though"
X Link @Brad_Setser 2025-10-14T19:13Z 139K followers, 10.8K engagements

"@NGurushina or a semi-mechanical response to the weakening of the USD on Friday or (my view) a desire to signal that they are happy with CNY XXX and don't want currency to be part of any trade/ market discussion "
X Link @Brad_Setser 2025-10-13T04:27Z 139K followers, 1924 engagements

"Argentina's Finance Ministry (I assume) is selling the dollars it bought from Argentina's grain/ soy trading houses last week at a pretty substantial clip right now 1/2"
X Link @Brad_Setser 2025-10-01T19:39Z 139K followers, 11.8K engagements

"There are solutions (the DoD is offering price guarantees) -- but they have a price tag. The fundamental problem is that projects that provide economic security don't necessarily deliver a clear commercial return 13/"
X Link @Brad_Setser 2025-10-11T21:50Z 139K followers, 4973 engagements

"Argentina continues to intervene in the currency market desperately to keep the peso off the weak edge of the band -- It also is doing a fair amount of backdoor intervention . 1/"
X Link @Brad_Setser 2025-10-08T16:55Z 139K followers, 41.8K engagements

"At the same time I think it is fair to say that the Koreans have resisted the drift of the won down to very weak levels (similar to XX and 98) even as their external surplus has increased . 6/"
X Link @Brad_Setser 2025-10-03T03:36Z 139K followers, 2439 engagements

"@pstAsiatech @Lingling_Wei Paul -- that is a serious claim and I would appreciate your evidence here as you generally lean against most US controls. Starting with the background as I haven't followed it closely -- why is the XX% rule existential for China in a way that other export controls were not"
X Link @Brad_Setser 2025-10-10T17:15Z 139K followers, 46.9K engagements

"Bloody XXXX 3/"
X Link @Brad_Setser 2025-10-15T05:15Z 139K followers, XXX engagements

"Agree with Karthik . Bessent's dollar policy is support for a weak yen (hurts US auto manufactures) and a strong peso (doesn't do much to help US ag)"
X Link @Brad_Setser 2025-10-09T22:20Z 139K followers, 14.4K engagements

"China really has put its full economic toolkit on the table -- using its control of grain and oil seed imports (COFCO) to zero out orders for beans (having a bit of a stockpile helps) and rolling out an extraordinary set of export controls . 3/"
X Link @Brad_Setser 2025-10-10T16:51Z 139K followers, 23.2K engagements

"@Jgerryi thanks; tis good to know that i came across as someone you might want to have a beer with so to speak in the podcast "
X Link @Brad_Setser 2025-10-14T05:44Z 139K followers, XX engagements

"To flog a dead horse this isn't obvious from the IMF's forecasts -- which have China's current account surplus peaking at XXX% of GDP in 2025 and falling back to X% over time . 1/2"
X Link @Brad_Setser 2025-10-14T19:08Z 139K followers, 30.1K engagements

"The WEO forecast for China's 2025 surplus is XXX% of GDP (the h1 surplus) so an upward adjustment from the absurd $370b surplus in the ESR. That surplus is forecast to fall to XXX% of GDP in XX and then down to X% of GDP in 2020. No problem here worth global concern . 2/"
X Link @Brad_Setser 2025-10-14T17:23Z 139K followers, 4774 engagements

"The yen also hasn't recently moved with at least the 10y rate differential (and there is an argument that other rates matter more of course . but the same would be true at most tenors) 2/"
X Link @Brad_Setser 2025-10-06T21:17Z 139K followers, 4464 engagements

"If only the IMF could come up with a set of charts and forecasts to support Gourinchas' sensible position that China's surplus is too big and the US deficit is too "
X Link @Brad_Setser 2025-10-14T19:44Z 139K followers, 15K engagements

"Useful chart. Euro is very strong against almost all of East Asia these days -- no real mystery why Europe's trade balance would be slipping but for tax driven Irish pharma . 1/2"
X Link @Brad_Setser 2025-10-06T23:55Z 139K followers, 38.9K engagements

"@kevinziyizhao and allow China to continue to build up supply chain leverage for the future as more global manufacturing concentrates in China And allow China to continue to rely on net exports to mask its own internal imbalances . seems to me China needs to change too"
X Link @Brad_Setser 2025-10-12T19:41Z 139K followers, XXX engagements

"Not the most obvious way to build a coalition aimed at countering China's choke hold on rare earths and other critical minerals. Spain is part of the EU so this would violate the agreement struck with Von der Leyen"
X Link @Brad_Setser 2025-10-14T19:02Z 139K followers, 13.7K engagements

"Recirculating these comments now that the US has announced the Exchange Stabilization Fund will become the Argentine Peso Stabilization Fund "
X Link @Brad_Setser 2025-09-24T14:20Z 139K followers, 20.2K engagements

"@IMFNews It is a major problem for the IMF's global surveillance that its current account estimates put China's surplus below that of Japan (with balanced goods trade) and Germany (which is doing a real fiscal expansion) and in the long run the EU . 10/"
X Link @Brad_Setser 2025-10-14T17:45Z 139K followers, 2292 engagements

"+ the US had won a WTO case against China's export controls on rare earths (controls that were were intended to encourage manufacturing of items using permanent magnets in China) and well it viewed as bad form to tariff something that the US wanted to China to export freely 5/"
X Link @Brad_Setser 2025-10-11T21:40Z 139K followers, 6709 engagements

"I need to look at more indicators but one easy one is imports from Taiwan and Korea (chips basically) . and they jumped in September 3/"
X Link @Brad_Setser 2025-10-13T04:49Z 139K followers, 3086 engagements