Global Economy

Panama Canal cargo capacity will double by 2016.

The largest 1,000 of the world’s 5,100 container ships are now too big for the Canal, and they account for half of all world container capacity. And the Canal can handle only 6 percent of the world’s LNG tankers, which implies a sharp limit on future shipments of natural gas from the American Gulf Coast to China and Japan. Hence the Canal is being redug.

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Global Economy

Congress carried out an unplanned tariff-hike experiment last year by letting GSP expire. China looks like the beneficiary.

The Generalized System of Preferences, known for short as “GSP,” expired on July 30th, 2013. A year of this unplanned experiment suggests results as follows: (a) smaller developing countries’ share of imports has fallen; (b) China’s share has grown, and (c) overall import trends are unchanged.

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Global Economy

Ladies’ tariff surcharge on underwear: ~50 cents.

Americans imported 600 million articles of men’s underwear in 2013. The $76 million tariff total implies an average border tax of 12 cents on each. The $566 million in tariff money from women’s underwear came from 2050 million articles of lingerie, so on average each got a 27.5 cent tax. Markups typically triple the price of a product from port to cash register, so the tariff system adds about 35 cents to the cost of each pair of men’s underwear, and a bit more than 80 cents to women’s. Thus the 50-cent ladies’ surcharge.

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Global Economy

Japan’s population shrank by 244,000 last year.

According to the UN’s “medium-level” estimate, by 2050 East Asia’s population will decline by at least 30 million, and perhaps as much as 100 million if Chinese births decline more rapidly than expected. In eastern Europe, populations began to drop earlier and are falling faster. Meanwhile, populations in South Asia, Africa, and the Middle East are surging.

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