China is exporting 11 million cars a year and Trump just invented a toll booth in the ocean · Daily Briefing

In 30 seconds: China reported record export growth of 27% year-over-year in June while its passenger car exports hit an 11 million annualized pace, and analysts flagged serious deficiencies in China's IMF-promised financial account disclosures alongside new US chip export control tightening. President Trump abandoned his proposed 20% Strait of Hormuz transit toll in favor of trade and investment deals with Gulf states, though analysts noted the original demand was never practically enforceable, while oil markets remained volatile amid ongoing regional tensions. Ethereum outperformed major macro assets on the day of the soft CPI print, with analysts pointing to ETH/BTC upside breakout and institutional tokenization launches as evidence of a broadening crypto rally and strengthening the case for ETH as a monetary asset.

China's 27% year-over-year export growth in June blew past the 18% consensus forecast and marked the fastest annual pace of export growth since October 2021, accelerating from 19% the prior month. The headline number is striking on its own, but the composition underneath it is where things get interesting. Chinese passenger car exports hit an 11 million annualized pace in June. Over the course of 2026, the trailing twelve-month sum climbed from roughly 7 million to 10 million units. For comparison, Germany's net car exports sit between 1 and 1.5 million per year. China's automotive trade surplus, excluding batteries but including parts, now runs around $200 billion, or 1 pp of GDP. Add batteries and the figure reaches $300 billion, equivalent to 1.5 pp of GDP. China turned a domestic clean energy policy into a massive export success. The resulting surplus is enormous relative to the world economy and, measured in goods and services as a share of GDP, actually bigger than Germany's, let alone that of others. Meanwhile, the quality of China's financial disclosures is moving in the opposite direction. China promised the IMF that it would improve the reporting of its income balance and fill in gaps in its financial account data, and the resulting disclosure in Q1 was comically bad. The China Investment Corporation didn't appear as 'portfolio investment, government' where it obviously should, and loans of the policy banks disappeared or were bundled with deposit taking banks. On the technology front, the US continues its effort to close loopholes in export controls that have allowed advanced AI chips to reach China through third countries, despite years of restrictions.

The lifecycle of the Strait of Hormuz toll was brief and instructive. Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States. Those investments, he added, will be MASSIVE. You will notice the shift from a unilateral fee to a bilateral negotiation, which is the kind of pivot that happens when you announce a policy and then discover it requires either a navy or a tollbooth in the middle of an ocean, neither of which you have budgeted for. Analysts were less convinced. The toll was never a serious demand, and the likelihood of implementation was roughly the same as the likelihood the US was going to destroy Iranian civilization. The practical math never worked either. Applied to Iranian dark fleet ships, the 20% toll would have amounted to roughly $15 per barrel, generating perhaps $100 million in revenue. That is not nothing, but it is also not a number that justifies rearranging the geopolitics of global energy transit. The United States cannot ensure the strait stays open absent an agreement (which it doesn't have) or significant military escalation (which it has been unwilling to do). Iran maintains military capacity and political will. Oil markets, for their part, were already moving on real fundamentals. Brent prompt timespreads swung from mild contango last week to more than $2 per barrel backwardation, signaling that the immediate supply-demand balance has ratcheted decisively tighter. Brent crude sat at $86.50 a barrel. US gasoline front-month futures climbed to $137 per barrel from a low of $121 a month ago, though inflation-adjusted prices remained at the 58th percentile. The Iranian blockade was set to start today at 4 PM ET, arriving in a week already shaped by the re-ignition of the Iran war. The toll is gone. The strait is still there.

There is a certain kind of day where the CPI comes in soft and everyone looks around to see which asset class threw the biggest party. On this particular day, ETH was the best-performing macro asset. If you are the kind of person who thinks crypto is a speculative sideshow that trades on vibes, this is an inconvenient data point. One strategist takes this further. In his view, the soft inflation print strengthens the argument that ETH is money. You can agree or disagree, but the market at least voted with its wallet on the day.