The current standards for dishwashers took effect in 2013. The standards, which were based on a consensus agreement between manufacturers and efficiency advocates, specify minimum energy and water efficiency levels. The standards require that standard-size dishwashers use no more than 307 kWh per year and 5.0 gallons of water per cycle.
In 2024, DOE finalized amended standards for dishwashers based on a joint recommendation from manufacturers and efficiency advocates. The new standards for dishwashers will cost-effectively reduce energy consumption by 15% relative to the current standards while also cutting water waste. Dishwashers
It is a general problem, but what started me thinking about it was being told by my dishwasher that it would take three and a half hours to wash the dishes. That seems, judging by a quick search online, to be longer than average but still within the normal range. I have not been able to find figures online for how long dishwashers took twenty or thirty years ago but, by what I remember, it was substantially less — and the dishes ended up dry, which ours don’t.
The explanation is in the final word of the quote above, “waste”. The owners of dishwashers pay for water and power, so if making them more efficient in those dimensions was costless, did not require giving up something else, there would be no need for the Department of Energy to make the manufacturers do it. I conclude that it was not costless, that it either made dishwashers cost more or do their job less well — take longer, not dry the dishes as well, not clean them as well. Using more power or water to do a better job is not waste.
David Friedman, “Optimizing On A Single Variable”, David Friedman’s Substack, 2025-06-02.
September 20, 2025
QotD: Why modern dishwashers suck
September 15, 2025
QotD: Federal equalization payments
Perhaps the most fascinating component of [Prof. Thomas] Courchene’s paper is his subtle discussion of what, precisely, equalization is for. Is it meant to render every province in Canada equally well off in general? Or is it meant only to correct inequities introduced by the provinces’ different geographic and natural circumstances? Or is it meant even more narrowly, as a scheme to ensure that the federal government doesn’t accidentally worsen those inequities? Or it is meant merely to discourage culturally harmful labour migration?
There is no official answer to this question, and all the possible answers lead to moral and mathematical absurdities. It’s not just that we don’t know whether equalization works, as Terence Corcoran observed in the Financial Post yesterday. We literally don’t even know what it’s meant to accomplish
Colby Cosh, “Economist plays ethicist”, National Post, 2005-09-01.
September 11, 2025
The Archbishop of York misunderstands a recent child poverty report
Tim Worstall knows that it’s unrealistic to expect a prelate of the Church of England to believe in anything, but in this case His Grace Stephen Cottrell, the Most Reverend and Right Honourable Archbishop of York appears to believe that child poverty in Britain is a very serious problem:
His Grace Stephen Cottrell, Archbishop of York since July, 2020.
Photo 2014 via Wikipedia Commons.
So we’ve the Archbishop of York here telling us all how it should be. Of course, given that that prelacy is Church of England he doesn’t actually believe anything, of course not. But he does roll out what he considers to be facts. Which, sadly, are not.
With all children across the UK back in school as of this week, I am reminded that almost one in three are in poverty. That statistic is shocking enough – but behind every number is a child, and what this statistic means is children arriving at school hungry, living in insecure housing, and missing out on the activities that help them thrive.
Well, no. His near one in three comes from this JRF report. Which is not measuring poverty at all. It’s measuring inequality — the number of people living in a household on less than 60% of median household income. Which is not, in fact, poverty.
No, think on it. If we doubled the — real — income of everyone in the country then clearly we’d have less poverty. But by this measure, the one of inequality of incomes, the number in poverty would change by not one single person nor child. Equally, if we halved everyone’s incomes — real incomes that it — there would be a lot more poverty. But by this measure there would be no change at all.
There’s also this:
I visited a school in the north-east of England a couple of years ago where many of the pupils turned up with empty lunchboxes. There was a breakfast club that fed them on arrival. They were eligible for free school meals, so got a hot lunch. After school, trestle tables were set up in the playground laden with food donated from the local food bank. As they went home, they filled up their lunchboxes so that they could have some tea.
I have rarely been so shocked. This is the reality of child poverty.
Kids are packed to the gunwales with food and this is a sign of poverty? Eh? Sure, sure, I know consubstantiation is pretty heady stuff but really, a little contact with reality please? Kids get two full meals and tuck to take home. This is all free. So, logically, their parents send them to school with empty tuck boxes so that they get two free meals and stuff to take home. I mean, free stuff, who wouldn’t?
Who goes to the pub to pay £7 a pint when booze is flowing free from the town fountain?
Update, 12 September: Welcome, Instapundit readers! Please do have a look around at some of my other posts you may find of interest. I send out a daily summary of posts here through my Substack – https://substack.com/@nicholasrusson that you can subscribe to if you’d like to be informed of new posts in the future.
August 31, 2025
QotD: The “working” world
In other words, at least a fifth of our working time is spent doing nothing, or rather nothing productive. Most people are incapable of doing nothing, in the strict sense that a meditator does nothing. Moreover, much of their activity may not merely be unproductive but positively counterproductive, in so far as most people at work feel obliged to do something, and by far the easiest thing for them to do with their superfluous time is to obstruct others, to have unnecessary meetings and so forth.
If taken seriously, not only offices, but millions of journeys to offices, would become unnecessary, pollution would decline and leisure time would increase. This latter would be a disaster, since most people do not know what to do with themselves as it is. It is for this reason that work is not arranged as efficiently as possible, but its productive aspect is diluted by myriad unnecessary tasks — unnecessary, that is, from the narrow point of view of production. Except in the factories of the East, where production is all, a great deal of work is designed to keep us occupied while we produce nothing. It ameliorates boredom and prevents the bad behaviour in which boredom results.
Anthony Daniels, “The Pleasant Embrace of Fear”, Quadrant, 2020-05-06.
August 30, 2025
Canada’s economy is going the wrong way
The latest figures show the US economy growing by 3.3% while Canada’s shrank by 1.6% in the same period. It’s bad news for Canadians, except those like Prime Minister Mark Carney who have the bulk of their investments in the United States (91% for Carney, according to various sources). On X, Dan Knight explains what is happening:
Canada’s economy just shrank. That’s the headline. In the second quarter of 2025, real GDP fell 0.4%. On a per-person basis, it was the same. Canadians are poorer than they were three months ago. That’s not speculation. That’s Statistics Canada’s official number.
So, here’s what happened. The government and its media allies spent the spring bragging that the Canadian economy “grew” in the first quarter of 2025. Real GDP was up half a percent. Sounds good, right? But if you read the fine print, if you look at the numbers it wasn’t real growth at all. It was panic.
Exporters rushed to push product into the United States before tariffs came down. Automakers. Machinery producers. Parts suppliers. They all jammed as much across the border as they could, knowing the window was closing. That sugar high showed up in the Q1 GDP number. It made the economy look like it was humming along.
Then the tariffs hit. And in the second quarter, the bottom fell out. Exports collapsed down 7.5% overall. Passenger cars and light trucks? Down nearly 25%. Machinery and equipment? Down 18.5%. Travel services? Down 11%. The result: GDP fell 0.4%. On a per-capita basis, it was exactly the same. Canadians are literally poorer than they were three months ago.
This is the story you’re not hearing: Q1 wasn’t proof of a healthy economy. It was proof of a desperate one. Businesses scrambling to get ahead of trade barriers, because they knew Ottawa wasn’t going to stop them. Q1 was fake growth, and Q2 was the crash.
Meanwhile, households are spending more, saving less, and wages are barely moving up just 0.2%, the slowest since 2016 outside of COVID. Corporate profits are falling. Government revenues are down since the carbon tax was lifted. And Ottawa’s answer? Spend more. Borrow more. Pretend it’s all fine.
So the question is simple: if this is what “growth” looks like under Mark Carney’s Liberal government front-loaded exports, collapsing investment, rising debt what does the next quarter look like?
On her Substack, Melissa Lantsman says that the economic situation in Canada is discouraging investors from putting money into Canadian companies:
You don’t need to be a foreign investor to see that putting your money into Canada is not a winning move.
Recently, Statistics Canada reported “strong foreign divestment in Canadian shares” across many sectors, including energy, mining, and manufacturing. At the same time, Canadian buyers also moved their money stateside, purchasing $13.4 billion of foreign securities in just one month.
If this were a small, short-term blip, it would be easy to dismiss it as market noise or an aberration. But that’s not the case: Statistics Canada found four consecutive months of net divestment from the Canadian economy, adding up to $62 billion in lost capital.
And that’s not to mention that every year since 2015 has seen more Canadian investment going abroad than foreign investment coming here. For those keeping track, this is the fastest rate of divestment in Canada since the Great Recession.
What does this all mean?
From an investor’s point of view, there’s no sugar-coating it. Canada is, simply put, an unattractive place to invest hard-earned cash. People making financial decisions for the future don’t have confidence in the Canadian economy to make them money.
From a government’s point of view, it should mean alarm bells ringing left, right, and centre. Lower investment in Canada translates into lower productivity, fewer employment opportunities, less government revenue, and a weaker Canadian dollar, leaving us all worse off.
But why is this happening in the first place?
According to the C.D. Howe Institute, the culprits are familiar: high taxes, regulatory barriers, policy uncertainty, and anti-growth mindsets that penalize success and demonize the private sector.
Anyone who has been paying attention for the last ten years knows that’s exactly what’s been happening. Nothing says “Welcome to Canada” to investors quite like a hike in the capital gains tax at the last minute, chaos at the CRA, multi-year project approval processes, and the highest deficits on record.
And anyone serious about fixing the problem would do the exact opposite of what the last government did. But when your new government is the same as the old one, it’s hard to believe Canadians will get the bold economic transformation this country desperately needs.
August 28, 2025
Prices are critical economic signals that we ignore at our peril
At the Foundation for Economic Education, Tim Worstall explains the importance of prices in a free market economy:
Prices matter. Now, I’m a free market, capitalistic type, so of course I’m going to insist that everyone be tied down to mere gilt and pelf in how they live their lives. Yet it is still true that prices really, really matter.
Let’s walk through why that’s true, regardless of your political tribe. Any one thing — any economic resource, fresh water, human labour, cash, capital itself and so on — can be used for a multitude of different things. At any one time, the market price for that thing is the balance between the supply of it and the value in using it to do — in aggregate — all those multitudinous things. Yes, we can even mutter that perhaps the information doesn’t flow here instantaneously and perfectly efficiently. Nevertheless, in its simplest terms, what something costs reflects the value of whatever uses we can put it to.
If we decide that we want to do something new, we need a measure of whether we should or not. In a world where resources are finite, the resources we’ll consume doing this new thing already have prices, thanks to their use in all the other things we’re already doing. So, this new thing we desire to do must add value. We must make a profit doing it. No, this doesn’t mean something that tophatted capitalists get to squirrel away in their subvolcanic secret lair. Rather, it means that the value of the output must be higher than the costs of the inputs. If that’s not true, then we are subtracting value from those resources. Other people could have used them to do their thing and generated value instead.
If something makes us all poorer, we shouldn’t do it. But that’s exactly what happens whenever we use valuable resources to do something which is of less value than the price we pay to do it. Say, for example, recycling disposable vapes:
“CBD Living Vape – Disposable” by weedporndaily is licensed under CC BY 2.0
.
Vape sellers will have to pay for the disposal of the devices under plans announced by the government.
Ministers said they would “end the UK’s throwaway culture” as they revealed measures to fund the recycling of electrical waste.
Recycling these vapes’ electronic waste uses more resources than not recycling it. This is why we’ve got to find someone to pay for it — because the value of the resources required to do the thing is greater than the value of having the thing done.
Now I am not against recycling per se — I cannot be, having dealt in scrap metal. I once shipped lorryloads of Soviet nuclear scrap off to be made into fancy car wheels for boy racers’ Escort XR3is. My only whine about that was not also gaining the furry dice concession. Even so, I made a house-sized chunk of money doing it. That’s because I’d added value by working out what the scrap could be used for and getting it to where it could be used to do just that.
But if we mandate a recycling system that makes no profit, adds no value and in fact requires an outside input of money into financing it, then we’re throwing away value and making ourselves poorer. The prices are telling us we should not be doing this thing. That’s why we ignore prices at our peril.
August 23, 2025
“Trump … sees transshipment and nearshoring as sneaky workarounds”
At the Foundation for Economic Education, Jake Scott explains Donald Trump’s latest anti-trade moves:
President Donald Trump’s executive order of July 31st, effective August 7th, has upended global trade dynamics in a single stroke. Slapping a 40% tariff on all “transshipped goods” — products rerouted through third countries to dodge US duties — this is merely the natural development of his evolving protectionist agenda.
Just a week after the order, the move is a clear shot at China’s sprawling manufacturing empire, which has long exploited methods like transshipment and “nearshoring” to skirt American tariffs in general, and Trump’s tariff policies in particular.
While applied globally, China stands to take the biggest hit (and likely already is), with its vast factory networks and knack for rerouting goods through Southeast Asia, Mexico, and beyond. This isn’t just a tariff hike; it’s a calculated escalation in Trump’s ongoing crusade to reshape US trade policy and the global economy in the United States’ favor. But ripple effects that bruise consumers are already visible — and this move is likely to strain relationships with key allies as well.
The new tariffs build on Trump’s first-term strategy — so extensive that it now has a Wikipedia entry — when he wielded America’s economic heft like a sledgehammer to renegotiate or smash trade deals he deemed unfair. Back then, Chinese firms sidestepped US tariffs by setting up shop in countries like Vietnam and Mexico, funneling goods through these hubs to mask their origins.
This nearshoring strategy buoyed many economies that had pre-existing arrangements with the United States or were treated more favorably than China, such as Canada and Latin American nations. It is also seen as a natural part of globalization: shipping parts from where they are constructed (like China), assembling them in developing nations (like Mexico), and then exporting to high-value markets (like the United States). Nearshoring has a long history, but the fragility of extended global supply chains was exposed in the Covid pandemic; since then, manufacturers have sought to mitigate their damage.
The US trade deficit with China (roughly $295 billion) has long been a sore point for Trump, who sees transshipment and nearshoring as sneaky workarounds. The 40% duty on these goods, layered atop existing tariffs, aims to plug this loophole. As Stephen Olson, a former US trade negotiator, noted in the New York Times, China will likely view this as a direct attempt to “box them in”, potentially souring already tense talks.
August 21, 2025
QotD: Computer models
But note: for 100 dollars or negotiable, I will produce a minority report that will explain everything, infallibly. I will not preview the report in this Idlepost, however, because it might be worth money to me.
Aw, heck. Since I am rich beyond the dreams of avarice, let me just go ahead and blow all the beans. Let me recklessly tell gentle reader why computer models are always mistaken.
It is because their makers decide the result, before they design the model.
This does not mean they are self-interested phanatics, consciously preying on the gullibility of a drooling, ignorant public; although usually it does. For even if, by disposition, they are lofty, objective types, they will need, objectively, a lofty budget to perform a “credible” study. This means they must beg huge sums of money, and this will only be available from a source with an unhealthy interest in the result.
You see, the problem has nothing to do with computers. Even among humans, the phenomenon of “garbage in, garbage out” is well attested. The intention of following the evidence where it leads, is transient. I should think only a saint could sustain it, for longer than he could hold his breath under water.
David Warren, “A note on sternutation”, Essays in Idleness, 2020-06-19.
August 20, 2025
“All politics is local” … except when it isn’t
Lorenzo Warby on a recent study of the vast chasm between what European voters want in areas like crime and immigration and what their elected representatives want:
Economist Laurenz Guenther has performed the very useful exercise of quantifying how unrepresentative the views of European politicians are of their voters on cultural issues, such as crime and immigration. This is not true of economic issues, where the views of politicians tend to be quite representative of their voters.
In the case of economic issues, in some countries the politicians are more pro-market (“right”) then their voters, in others they are more dirigiste (“left”) than their voters, in others still they are very similar to their voters. There is simply no consistent pattern, and the average gap between voters and politicians across European countries on economic issues is fairly small.
With cultural issues, such as crime and immigration, we get a very different pattern. There, politicians are consistently more socially liberal (“left”) than their voters and by a considerable margin. While education levels explain some of this difference, they do not explain very much, as politicians are significantly more socially liberal than even university-educated voters.
Moreover, politicians are unrepresentative even of their own Party members/base on cultural issues and, again, in being much more liberal than their core supporters. There is some factor or factors specific to being a contemporary politician that systematically separates them out from voters on cultural issues yet does not operate with economic issues.
Veteran politician Tip O’Neill famously said that all politics is local. This is particularly true of cultural issues such as crime and immigration, where the effects vary wildly by location. This is much less true of economic issues, which are much more economy-wide in their operation.
There are various features we can identify here. First, executive function(s) — including such features as patience (aka time horizon) — varies between people and is highly heritable. Localities that have lots of people with poor executive function operate very differently from those where it is very much normal for people to have strong executive function.
As the combination of physical robustness and weak executive function predicts criminal behaviour, this has a great deal to do with why crime varies so dramatically by locality. This is especially as crime is very much a power law phenomenon, where a small minority of (overwhelmingly) men commit the vast majority of violent crimes.
Source – Wikimedia Commons.
It also means that people who have spent their lives in social milieus full of people with high executive function can have little or no sense of what happens when one has to deal with weak executive function folk. This is the people unlike me problem that so bedevils contemporary politics and commentary.
August 16, 2025
QotD: Rich anarchists
G.K. Chesterton, The Man Who Was Thursday, 1908.
August 14, 2025
The “Big Mac Index” is bogus and Purchasing Power Parity (PPP) is wrong
I started reading The Economist when I was in college in the early 1980s. I subscribed after I left college, no longer having access to the school library’s copies, and I continued my subscription for about 20 years. Eventually, I gave up on The Economist as their editorial stance shifted further and further leftward. One of the things they ran regularly was their “Big Mac Index” which compared prices of McDonalds’ Big Mac hamburgers across a range of countries to show the Purchasing Power Parity of the respective countries’ currency against the US dollar. I thought it was a neat way to use readily available data in a form that most consumers would be familiar with to illustrate a wider economic fact. But, as Tim Worstall points out here, the index isn’t actually measuring what it claims to be measuring at all:
Purchasing Power Parity (PPP) constitutes a foundational concept within mainstream international economics, asserting that, over the long term, real exchange rates will naturally adjust to equalize the purchasing power of currencies across nations. This suggests that the cost of an identical basket of goods should, in principle, be uniform globally once currency exchange rates are applied. This notion is frequently popularized through informal measures such as the Big Mac Index. PPP is conceptualized as a specific application of the Law of One Price (LOOP), which posits that, when abstracting from transactional frictions like transportation costs, tariffs, and taxes, any particular commodity traded or purchased should sell for a similar price regardless of its geographical location.
Aaaand, no. The Law of One Price says that a *traded* commodity should be at the same price everywhere, absent transport costs, tariffs and all the rest. Anything that’s not traded this will not be true of. For example, to use an example provided to us:
For instance, if a Starbucks coffee is considerably more affordable in Tokyo than in Manhattan, Purchasing Power Parity (PPP) would indicate an undervalued Yen.
No, Starbucks coffee is not a tradeable item. Coffee beans are globally traded, yes, and coffee beans are the same price the world over — given transport costs, tariffs and so on. But the coffee bean is pennies on the dollar of a Starbucks coffee.
The use of the Big Mac in The Economist‘s popular version of PPP actually runs entirely the other way around. The note is that a Big Mac is made the same way around the world. But it’s always made of *local* ingredients, not internationally traded ones. Therefore we are not measuring whether tradeable goods are the same price in different places at all — we’re measuring what local goods cost in different places.
Comparative advantage, whereby nations specialize in their most efficient productions for reciprocal benefit, is a myth. Absolute advantage reigns supreme.
Then there’s that as well. Which is to misunderstand comparative advantage as well. The insight is not about whether Britain makes cloth better than Portugal and then the same again with wine in reverse. Which is indeed absolute advantage. It’s about whether Britain makes cloth better than Britain makes wine, whether Portugal makes wine better than it does cloth. Each should do what they are *least bad at* and then share the increased production making both richer.
It’s also, once we move away from Ricardo, nothing to do with countries either. It’s something that applies to each and every individual. We should all do what we’re least bad at then swap the production. This does produce an interesting result for given how good, *ahem*, my economic writing is take a guess at how skilled I am at other ways of making a living? Quite.
So, you know, not getting PPP, LOOP nor comparative advantage — but still ending up calling for world government and that proper democratic control of the economy. Ah well, at least it’s fashionable even if incorrect.
August 13, 2025
The Dispossessed: State Happens
Feral Historian
Published 21 Mar 2025Ursula K. le Guin’s The Dispossessed is one of the most in-depth examinations of how a large anarchist society might function, addressing both the problems it solves and those it creates for itself. It’s a must-read for anyone interested in the communist-leaning variants of anarchism in particular.
00:00 Intro
01:58 Anarres is not an Island
04:45 Shevek goes to Urras
07:00 Abolition of Property
08:30 Social Pressures and Pravic
12:30 Necessity and Ossification
14:45 Necessity of Conflict
15:45 Shevek’s Wild RideThis video is in part a companion to this one — Cloak of Anarchy : Gradations of Stat… from a few weeks ago. The original cut of that one had a brief mention of a couple details from The Dispossessed, but it really needed its own video.
August 11, 2025
Smug Canadian boomer autohagiography rightly antagonizes the under-35s
Fortissax had an argument with one of his readers over a smug, self-congratulating meme about how wonderful Canada was in the 1990s and early 2000s:
What we lived through long before Trudeau was the Shattering, the breakdown of Canada’s social cohesion, driven by left-liberalism with communist characteristics applied to race, ethnicity, sex, and gender, and punitive almost exclusively toward visibly White men. My generation, those millennials born on the cusp of Gen Z, saw post-national Canada take shape not in the comfortable suburban rings of the GTA or the posh boroughs of Outremont and Westmount, but in self-segregated, ghettoised enclaves of immigrants whose parents never integrated and were never required to.
Memes like that are dishonest because they feed a false memory. The 2000s were not normal. Wages were stagnant, housing was already an asset bubble, and immigration was still flooding in under a policy that explicitly forbade assimilation. Brian Mulroney had enshrined multiculturalism into law in 1988. Quebec alone resisted, carving out the right to limit immigration under the 1992 Quebec–Canada Accord. After Chrétien, Stephen Harper brought in three million immigrants, primarily from China, India, and the Philippines in that order.
The Don Cherry conservatives of that era were Bush lite. They were rootless, cut off from their history, their identities manufactured from the top down since the days of Lester B. Pearson. They conserved nothing. For Canadian youth, it was the dawn of a civic religion of wokeness, totalitarian self-policing by striver peers, and the quiet coercion of every institution. My memories of that decade are of constant assault — mental, physical, spiritual — from leftists in power, from encroaching foreigners, and from the cowardice of conservatives.
Your 2000s might have been great. For us, they were communist struggle sessions. In 2009 we were pulled from class to watch the inauguration of Barack Obama, a foreign president, as a historic moment for civil rights. Our schools excluded us while granting space to every group under the sun: LGBT safe spaces and cultural clubs for Italians, Jamaicans, Jews, Indians, Indigenous, Balkaners, Greeks, Slavs, Portuguese, Quebecois, Iroquois, Pakistanis — every culture celebrated except our own. Anglo-Quebecers and Anglo-Canadians got nothing but an Irish club, closely monitored for “white supremacy” and “racism” by the HR grandmas of the gyno-gerontocracy of English Montreal. Students self-segregated, sitting at different cafeteria tables and smoking at different bus shelters. At Vanier, Dawson, and John Abbott College, these divisions were institutionalised. I remember walking into the atrium of Dawson, my first post-secondary experience, greeted by a wigger rolling a joint while a Jamaican beatboxed to Soulja Boy.
We became amateur anthropologists out of necessity, forced to navigate a nationwide cosmopolitan experiment from birth. We learned the distinctions between squabbling southeastern Europeans of the former Yugoslavia, and we did not care if Kosovo was Serbia or whether Romanians and Albanians were Slavic, they all acted the same way. We learned the divides within South Asia, the rivalries between Hindutva and Khalistani, the differences between a Punjabi, a Gujarati, a Telugu, a Pakistani, a Hong Konger, a mainlander, and a Taiwanese. We know the shades of Caribbean identity, the factions of the Middle East, and the intricacies of North African identity. We should never have needed to know these things, but we do.
For us, childhood in this cesspit was the seedbed of radicalism. We never knew an era when contact with foreigners was limited to sampling food at Loblaws. All we know is being surrounded by those who hate us, governed by a state that wants to erase us, with no healthcare, no homes, no jobs that are not contested by foreigners, and no money to start families.
August 8, 2025
China’s short- to medium-term reaction to Trump’s tariffs
In Reason, Liz Wolfe outlines some of the reasons China has not been suffering under the tariffs President Trump has levied on them over the last few months (unlike, say, Canada):
President Donald Trump and PRC President Xi Jinping at the G20 Japan Summit in Osaka, 29 June, 2019.
Cropped from an official White House photo by Shealah Craighead via Wikimedia Commons.
Total Chinese exports surged in July … but not to us. Compared to July 2024, Chinese exports were up 7.2 percent last month. “Its exports to Southeast Asia and Africa, key regions for reshipment to the United States, rose more than twice as fast as its overall exports”, per The New York Times‘ reading of the data. “China’s exports to the European Union, its main alternative to the American market, were also up very strongly.”
Specifically, “data released Thursday by the customs authorities showed the pickup was driven by strong growth in shipments to the European Union, Southeast Asia, Australia, Hong Kong and other markets, which more than made up for the fourth month of double-digit declines in US purchases”, reports Bloomberg.
Predictably, even the threat of tariffs has been enough to dampen trade. Remember, Washington and Beijing are still operating under a 90-day truce — set to expire on August 12, though it could be extended if a new agreement is reached — that holds off the imposition of higher tariff levels, namely, the tit-for-tat tariff increases that both countries had threatened. The truce also staves off export controls on certain critical rare-earth minerals and items that fall into the technology category. But still, current tariff levels mean a baseline 30 percent tariff on Chinese imports, which has been enough to depress trade.
For those in the Trump administration who are worried about trade deficits in particular, I suppose the good news is that we’ve made progress there: “For the last several decades, China has been selling as much as $4 worth of goods to the United States for each $1 of American goods that it buys”, reports The New York Times. Following China’s admission into the World Trade Organization, the trade deficit rose. Now, “tariffs have begun to reduce the imbalance. The United States announced on Tuesday that its overall trade deficit had narrowed in June to $60.2 billion, the smallest in nearly two years.”
It’s not clear why Trump administration officials, and the president himself, are so worried about trade deficits as something to eliminate for their own sake. We are dependent on Chinese goods to a rather substantial degree, which would pose a problem in the event of war with China (which is why the previous administration focused on improving our semiconductor manufacturing capabilities back in 2022). But you can just as easily make the case that it’s the vast volume of trade between the two countries — the deeply intertwined economies so reliant on each other (despite China’s claims of autarky and, more amusingly, communism) — that are incentivizing continued decent relations.
A few factors are at play that might help to explain why you likely haven’t felt a drastic increase in prices just yet. First, since there’s been a long lead-up to this trade war, many larger importers have stockpiled product over the last few months, so shortages haven’t been felt yet — they’ve just been selling off product they’ve been storing. Second, China has already managed to divert some stages of manufacturing to other countries—namely Vietnam — and some larger companies already have factories up and running in other Southeast Asian countries to avoid the “made in China” or “shipped from China” labeling. Expect more transshipping and manufacturing-locale creativity as a means of throwing customs officials off the scent.
August 4, 2025
The EU still dominates in one key area – over-regulation
At the Foundation for Economic Education, Cláudia Ascensão Nunes identifies the one area that the EU has carved out a unique niche for itself … and it’s global in scope:
EU regulations delenda est
In a world where global power is measured by military strength, technological innovation, or cultural influence, it is striking that the European Union, without housing major tech giants or centers of disruptive innovation, has turned bureaucracy into a tool of global power. It shapes the behavior of global companies, including American big tech firms, which adapt their products to comply with European norms. This phenomenon is known as the “Brussels Effect” and has positioned the EU as the world’s regulatory superpower, fueling growing tensions, particularly with the United States following the re-election of Donald Trump.
The European market comprises 450 million consumers with significant purchasing power, making it an essential destination for global companies. However, access to this attractive market comes with detailed regulations based on the precautionary principle, ostensibly prioritizing consumer and environmental protection, and enforced by an efficient bureaucracy capable of implementing and enforcing rules with precision. This combination encourages companies to align their global operations with European standards, as maintaining different product versions for each region is costly and complex. In practice, this exports European standards worldwide.
American big tech companies such as Apple, Google, and Meta exemplify the impact of the “Brussels Effect,” as they face the requirements of legislations like the Digital Markets Act (DMA) and the Digital Services Act (DSA). These laws have forced companies to overhaul their business models, often at high cost and with significant implications. The DMA, for instance, forced Apple to allow alternative app stores and third-party payment systems on iOS, leading the company to announce, in 2024, global changes to its app policy affecting users even outside Europe, with cost estimates in the billions of dollars to restructure its infrastructure and address revenue losses from the App Store.
Google, under the same regulation, was required to offer alternatives to its search engine on Android and to unbundle services such as YouTube, impacting its global strategy and requiring significant investments in new operating systems and interfaces. The company faced potential fines of up to 10% of its global revenue for non-compliance.
Meanwhile, Meta, under the DSA, was required to invest billions in content moderation systems, a serious imposition that openly seeks to control freedom of expression on a global scale. Operational costs increased by around 20%, according to market analysts. These costly adjustments are ultimately coercive due to the weight of the European market, demonstrating how Brussels shapes corporate behavior on a global scale.
These successive impositions and forced adaptations illustrate precisely Friedrich Hayek’s warning about the dangers of central planning. By replacing spontaneous order with top-down, uniform rules imposed by a technocratic authority, the capacity for local adaptation and respect for market complexity is lost. In this scenario, the European Union increasingly takes on the features of a regulatory Leviathan, a body concentrating disproportionate power in the hands of bureaucrats far removed from citizens, reducing freedom of choice and stifling innovation.
