The Outthinking Investor with Daleep Singh Follow the Money: Inside the World's Financial Plumbing
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Mar 10, 2026 
Brad Setser, Whitney Shepardson senior fellow at the Council on Foreign Relations and former U.S. Trade adviser, unpacks global capital flows and strategic economic leverage. He digs into China’s export surge and hidden state financing. He explores whether the world is reglobalizing, risks around North American trade rules, and why currencies and reserves move the way they do.
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Trade Patterns Distorted By Tax Avoidance
- Some globalization is unhealthy: profit-driven location choices and tax avoidance distort trade patterns.
- The U.S.-Europe biggest bilateral trade imbalance shifted from Germany to Ireland because U.S. firms route production to avoid U.S. taxes.
Intermediary Supply Hubs Complicate Tariff Responses
- Many countries avoid broad tariffs on Chinese imports because supply chains link imports from China to exports to advanced markets.
- Southeast Asian hubs import Chinese parts, assemble goods, then export to the U.S., making blunt tariffs economically costly.
Europe's Reluctance Stems From Rules And Market Access Fears
- Europe has been slow to counter China's export re-acceleration because it prefers WTO channels and fears damaging access to the Chinese market.
- Germany in particular is conflicted as automakers want Chinese production access even while losing market share to Chinese car exports.