1. Went back to @mjavadshamsi's excellent firm-level research on how Iranian manufacturers adjusted to sanctions. This chart is really key.

What really matters for economic resilience under sanctions is not import substitution, but continued access to *export* opportunities. 2. Boosting exports is how firms in sanctioned economies try to respond to flat domestic demand, currency volatility, and rising input costs.

But this strategy may not be viable in a world where China is trying to get out of its economic slump by boosting exports.

1. Today, President Biden issued an executive order authorizing sanctions to block foreign banks that facilitate transactions related to Russian "technology, defense... construction, aerospace, or manufacturing."

Will these new secondary sanctions hobble Putin's war economy? 2. Coinciding with the new executive order, @wallyadeyemo has an op-ed in the @FinancialTimes explaining what Treasury aims to achieve.

Banks that are found to be supporting Russia's "war machine" will "risk losing access to the US financial system."
ft.com/content/f1fe5e…

1. I recently learned that although the world's largest producer of cashews is Côte d’Ivoire, the world's largest exporter of cashews is Vietnam.

Vietnam is making a fortune. Côte d’Ivoire is not.

This is a story of successful globalization and failed industrialization. 2. Last year, Vietnam exported $791m of cashews to the EU and $885m to the US.

Meanwhile, Côte d’Ivoire exported just $85m to the EU and $41m to the US.

But Côte d’Ivoire is the much bigger producer, with a crop yield of ~800k tonnes, compared to Vietnam's ~400k tonnes.

1. This is an astonishing and terrifying report by @yuval_abraham on Israel’s use of an AI system called Hasbora to conduct mass targeting in Gaza, leading to “intentional” civilians deaths.

But who makes the Hasbora system?

That’s a key question.
972mag.com/mass-assassina… 2. Back in July @marissalnew detailed how the IDF had begun using an “AI recommendation system that can crunch huge amounts of data to select targets for air strikes.”

The system she wrote about is called “Fire Factory” and is produced by Rafael.
bloomberg.com/news/articles/…

1. Does anyone have a good explanation as to why the Afghani has strengthened 20% against the dollar in the last 6 months? How is the Taliban achieving this? 2. This report by @karllesteryap and @EltafN from September points to tighter regulation of the FX market by the Taliban, but there is little detail on potential role of trade.
bloomberg.com/news/articles/…

1. It is bizarre for Iran International to attack think tank analysts over a purported "lack of transparency."

Iran International is itself untransperant.

In five years, the network has burned through $569 million. They won't tell anyone who's footing the bill. 2. This is an excerpt from Brett Stephen's op-ed on the Iran "influence network" controversy. It could be about Iran International.

Setting aside the question of editorial independence, readers and viewers of the network's content deserve to know who owns and funds the channel.

1. Today I had to read *two* articles attacking the integrity of 5 individuals whom I consider colleagues and friends. They were attacked because, as part of their work for Western think tanks, they maintained dialogue and exchanged views with Iranian officials.

It's ridiculous. 2. Here's the thing that bothers me most. There is no purpose to this "journalism" other than to try to tarnish the reputations of five highly-regarded policy experts.

There is no public service here.

It is a hatchet job from two publications that should *really* know better.

1. This bland car is the MG5.

It's an electric vehicle and it's probably the most important car in the world right now.

The story of the MG5 shows how Chinese automakers are playing the long game and winning. 2. If you've recently taken an Uber in London, you've probably been in an MG5. They're everywhere.

They also came out of nowhere.

MG sales surged as the pandemic eased. In 2021, the company became "the UK’s fastest-growing mainstream car brand," selling over 30,000 units.

1. Reports indicate that the US and Iran are nearing an informal agreement to reduce tensions and get Americans held in Tehran released. The old back channel in Oman is being used.

It might seem like we are back in 2013, but the dynamics are really novel.
wsj.com/articles/u-s-l… 2. As @laurnorman + @DavidSCloud report, US officials have been relying on Oman to facilitate negotiations, which are still indirect.

Oman played a similar role in 2013, hosting US and Iranian officials for direct talks that set the groundwork for the JCPOA.

1. In hindsight, the Polestar 1 was the harbinger of China taking over the global automotive market.

Launched in 2019, the car didn’t get that much attention. It’s significance as a technical project was overlooked.

Just 1,500 cars were made. But there was a bigger plan… 2. Originally a performance brand affiliated with Volvo, Polestar is effectively a Chinese automaker.

Volvo was acquired by Chinese automaker Geely in 2010. Five years later, Polestar was spun out into its own brand to spearhead a push into EVs.

1. Five years ago, President Trump unilaterally withdrew from the Iran nuclear deal.

But he didn't just withdraw from an agreement that was working. He resumed an economic war on Iran.

Households across Iran's social classes have suffered, leaving people disempowered. 2. This chart is from a forthcoming report by @zepkalb looking at the effect of sanctions across Iran's social classes. The findings are striking. A sanctions program that was ostensibly about putting pressure on elites dramatically reduced consumption across all social classes.

1. I just spent the last four days in Beijing, seemingly among the first set of foreign tourists to visit in three years.

It was my first time in Beijing since a summer program in high school in 2009.

I thought I’d share some very reflections on what I saw, especially the cars. 2. I’ll start with a story.

At some point around the turn of the 20th century, Empress Dowager Cixi was gifted a German Benz Velo motorcar. It’s on display today in the Summer Palace, barely visible in Cixi’s dark throne room.

1. Lula wants to end the dollar's dominance in global trade. But Brazil may be somewhat insulated from any ensuring trade competition because it exports non-sanctionable goods.

Vegetable products (HS Section 2) made up more than one-third of Chinese imports from Brazil in 2022. 2. The strategic importance of food exports enables Lula to push China to be more aggressive in moving away from the dollar.

However, if the US responds with trade restrictions or sanctions, those measures will likely spare a big portion of Brazil's trade. So Brazil is hedged.

1. An extraordinary bet from Airbus, given the risk of US secondary sanctions in the future.

Tensions prevent Boeing from investing in China. Boeing may even struggle to sell aircraft to China in the coming years.

Will the US tolerate Airbus doing this?
bloomberg.com/news/articles/… 2. @GuillaumeFaury must have signed this deal after consulting with Élysée, but the track record isn't encouraging.

All it would take to hobble Airbus in China is FDD putting a memo on Trump's desk in January 2025 telling him to target China's civil aviation sector.

1. China is now a more important partner than the US for Saudi Arabia's development. Chinese exports of metals, machinery, and transport equipment have crowded out US exports. Once Saudis start using Chinese cars (and planes?), there will be little market share left for the US. 2. The flip side of this is that China imports significant quantities of Saudi oil. The US no longer does.

But given the new composition of Saudi trade, when there is an output cut, the higher oil price will hurt the US more than China.

1. Despite Iran’s history of mass movements and widespread anger, the #WomanLifeFreedom protests remained small and sporadic and have now subsided.

In @ForeignAffairs, I explain that ordinary Iranians need economic resources to exercise their political power.

The West can help. 2. The protests triggered by the death of Mahsa Amini felt different from the outset. They were led by women and political in their aims. They generated solidarity across class and regional lines. It seemed like the protests could snowball, despite the state’s violent response.

1. Why do broad economic sanctions hurt citizens more than elites in the target country?

Adapting from @rodrikdani, you can create a model to explain why this happens. 2. To think about sanctions we need to think about the impacts of economic shocks on the power of elites and citizens.

Sanctions are an exogenous shock that shift the economic possibilities frontier (EE) to the left, due to a drop in investment and reduced access to technology.

1. This is a postcard of the Compagnie Internationale des Wagons-Lits and Thomas Cook and Son travel agency in Tehran, Iran.

CIWL ran a line from Baghdad to Tehran off its Taurus Express service, which launched in 1930 with routes from Istanbul to Cairo and Basra. 2. CIWL customers could board the Simplon Orient Express in London and arrive in Cairo after 7 days or in Baghdad after 8 days following a transfer to the Taurus Express in Istanbul.

1. Discussions around de-risking, sanctions, and US dollar hegemony tend to focus on the use of the dollar as the key factor that turns banks into "chokepoints" (cc @henryfarrell + @ANewman_forward). But bank behaviours are only partly influenced by the transaction currency... 2. The whole point of secondary sanctions is that banks comply even when there is no nexus to the US dollar. It is conceivable to have a world in which the "petrodollar" wanes in importance but in which the vast majority of banks remain chokepoints that the US can weaponise.

1. Compelling argument from @RanaForoohar that the US and Europe should respond to the "rise of the petroyuan" by "moving away from fossil fuels."

But geopolitically speaking isn't that impulse precisely why key states want to de-dollarize?
ft.com/content/d34dfd… 2. The short term rise of shale oil production and the medium term push for the green transition explain why the US and Europe can now sanction countries with less political/economic blowback than before. This has made it more likely that sanctions will be used by policymakers.

1. On Iran, the critical question is why a protest movement motivated by such righteous anger has not generated large and durable traditional protests—so far.

What changes in political, economic, and social factors since 2009 are preventing mobilisations like those in the past? 2. Protests are not the only way for people to make demands of the state, but they are a really important mode of political action. We have generally taken for granted the idea that Iranians enjoy capacities for large protests given their recurrence in recent years.