Recommended Weekend Reads

Written By Francis Kelly

The Trump Trade Wars Bring Major Shifts in US Chip Policy, Escalating Risk of Conflict on the Moon, 5 Facts About Global Demographic Changes by 2100, and What’s Going on with the Grid?

August 1 - 3, 2025

Below are a number of reports and articles we read this past week and found particularly interesting.  Hopefully, you will find them of interest and useful as well.  We hope you have a great weekend.

Trade Wars & Semiconductors 

  • US alters tech policy, puts chips on the table   Jennifer Lee & Fritz Lodge/The Strategist

    A shift is underway in the Trump administration’s approach to tech policy.  Nvidia said on 14 July that the US government would soon grant it licenses to resume exports of its H20 chips to China. AMD is expecting the same for its MI308 chips. This may appear surprising after multiple statements from Trump administration officials that controls on the export to China of higher-end AI chips, such as the H20, were off the table.  This move doesn’t change the broader bipartisan consensus behind restricting China’s access to strategic tech, but rather fits into a pattern of recent decisions showing that tech export controls—previously viewed as a non-negotiable issue of US national security—can now be used as bargaining chips in trade talks with China.  This shift exacerbates uncertainty for domestic and international tech firms and will encourage Beijing to push for further loosening of controls in future negotiations.

  • How Does Semiconductor Trade Work?    Chris Miller/American Enterprise Institute

    Trade data on semiconductors is skewed due to the underreporting of imported semiconductors found in finished products like cars and phones. Any tariffs on semiconductors must carefully consider the structure of supply chains to avoid unintended consequences.  Much of the $40 billion of chips the US imports are actually made in the US, packaged abroad, and reimported, so tariffs would senselessly penalize domestic manufacturers. Since the US lacks packaging capacity, higher tariffs would raise costs and hurt competitiveness in key industries.  The US should focus tariffs on Chinese-made chips while striking sectoral trade deals with allies that commit both sides to zero tariffs, reducing non-tariff barriers, and continuing to invest in diversified supply chains.

Demographics

1. Global population growth is expected to slow between now and 2100 (the population is expected to peak at 10.3 billion in 2084).

2. The world’s three most populous countries in 2025 are expected to have radically different trajectories in the coming decades (India will grow, China has begun to shrink and fall sharply, and the US is expected to grow slowly and steadily).

3. Five countries are expected to contribute more than 60% of the world’s population growth by 2100 (The Democratic Republic of Congo, Ethiopia, Nigeria, Pakistan, and Tanzania).

4. The world’s population is expected to get older (the median age is projected to rise to 42 by 2100, up from 31 today and 22 in 1950).

5. Africa is currently the world’s youngest region, and it’s projected to stay that way in 2100.

  • Why Is Fertility So Low in High Income Countries?    Melissa Schettini Kearney & Phillip Levine/NBER

    This paper considers why fertility has fallen to historically low levels in virtually all high-income countries. Using cohort data, we document rising childlessness at all observed ages and falling completed fertility. This cohort perspective underscores the need to explain long-run shifts in fertility behavior. We review existing research and conclude that period-based explanations focused on short-term changes in income or prices cannot explain the widespread decline. Instead, the evidence points to a broad reordering of adult priorities with parenthood occupying a diminished role. We refer to this phenomenon as “shifting priorities” and propose that it likely reflects a complex mix of changing norms, evolving economic opportunities and constraints, and broader social and cultural forces. We review emerging evidence on all these factors. We conclude the paper with suggestions for future research and a brief discussion of policy implications.

  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come    Nicholas Eberstadt/Fertility and Sterility

    Abstract: This article addresses the prospect of global depopulation and its far-reaching implications. It argues that the advent of world population decline may come sooner than commonly anticipated, due to remarkable drops in birth rates underway in low-income regions as well as more developed locales. Notwithstanding uncertainties about the precise level of planetary fertility (due mainly to limited statistical capabilities in Africa), it is clear that overall childbearing patterns for our species are at most only slightly above the replacement level today—and might already actually have fallen below that significant threshold. Prolonged sub-replacement fertility will have far-reaching social, economic, and political ramifications. The following pages attempt to describe some of them, and to offer an introductory exploration of the new questions that could face problem-solvers in the future.

     

  • Africa’s future demographic dividend matters to Europe today    ISS/African Futures

    Africa’s demographic surge offers Europe a chance to rethink labor, migration and global partnerships through a lens of long-term interdependence.  Europe’s population is shrinking, while Africa’s is growing. By 2050, Africa will be home to one in four people globally.  Similarly, the EU’s labor force is shrinking and aging, while Africa’s is growing rapidly and becoming younger. By 2050, more than 60% of Africa’s people will be of working age. In Sub-Saharan Africa, the labor force will more than double. It will have increased from 505 million in 2023 to 1,058 million people, while Europe’s labor force will have declined from 370 million to 342 million.

The Growing Electrical Supply Challenge 

  • AI Demand Drives Record Electricity Supply Costs In Largest US Market   Financial Times

    The cost of providing electricity in America’s largest power market will hit a record high owing to soaring demand from artificial intelligence data centers and delays in building new power plants, raising energy prices for consumers.  Grid operator PJM said it procured energy supplies for $329.17 per megawatt day, a 22% increase compared with the previous year. The organization will pay power producers $16.1bn to meet its energy needs from June 2026 to May 2027, a 10% increase compared with the previous year. The operator said it expected a 1-5% rise for customers in their energy bills, depending on how utilities and states passed on costs. PJM sets prices at an annual capacity auction where power suppliers bid to provide the region’s projected demand. Earlier this year, PJM and some state governments took steps to try to keep power prices lower after last year’s capacity auction delivered a $269.92 per MW-day price — a more than 800% increase from 2023.

  • Power Check: Watt’s Going On With The Grid?   Bank of America Institute

    The US grid is facing an extended period of load growth. And while the drivers of this growth have changed over time, demand is largely due to 1) building electrification; 2) data centers; 3) industrial demand; and 4) electric vehicle (EV) adoption. If load growth forecasts continue to rise, utilities will need to invest to meet required reserve margins and increase spending on both power generation and transmission & distribution capacity. The good news? Deregulation and accelerated permitting may further help get more projects off the starting line, according to BofA Global Research.

  • Are Small Modular Reactors Worthy of the Hype?   Oilprice.com

    Nuclear energy is experiencing a political and technical renaissance. Around the world, nuclear fission is gaining traction as a critical piece of the puzzle for maintaining energy security while also slashing greenhouse gas emissions. Much of the renewed excitement over nuclear power comes from advances in nuclear technologies, particularly small modular reactors (SMRs), which are supposed to make nuclear capacity expansion cheaper, safer, and more efficient.  However, Even though there is excitement from investors and policymakers alike, getting SMR models approved is taking much longer than anticipated. Only one model has been approved in the United States, and it is not yet operational. But many, many more designs are waiting in the wings.

Francis Kelly
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