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The $67 Billion Tariff Loophole
China benefits as retailers take advantage of rule waiving duties for small purchases
BY JOSH ZUMBRUN
China benefits as retailers take advantage of rule waiving duties for small purchases
BY JOSH ZUMBRUN
WASHINGTON—The rule that allows American tourists to bring back souvenirs from overseas duty-free is now being used by companies to avoid billions of dollars in tariffs—and it’s perfectly legal. Known as the de minimis rule, the exemption has been around for decades, deriving its name from the Latin term for something too small to fuss with. For many years, it was just that—accounting for such a sliver of imports that U.S. Customs and Border Protection didn’t even bother to keep track of them. It’s a sliver no more. The known value of de minimis imports soared to over $67 billion in 2020 from an estimated $40 million in 2012 , according to previously unreported U.S. Customs data reviewed by The Wall Street Journal.
The rise of e-commerce in recent years accustomed shoppers to order just a few items at a time—which easily falls under the de mini-mis rules—and led to steady growth in such shipments. Then a sharp jump came in the wake of higher tariffs imposed by the Trump administration on Chinese imports, according to the Customs data and logistics industry executives, who say the new levies led importers to devise ways to dodge paying them. As a result, more than a tenth of Chinese imports by value now arrive as de mini-mis shipments, the Customs data indicate, up from well under 1% a decade ago. The increase was also fueled by a 2016 decision by Congress to raise the maximum value of deminimis imports to $800, up from $200. The law allows U.S. retailers who sell Chinese imports— along with Chinese companies that sell directly to U.S. consumers— to avoid tariffs on goods as long as they are packaged and addressed to individual buyers and fall below the $800 cap.
Groups including the Coalition for a Prosperous America, which includes U.S. manufacturers and labor groups, are urging Congress to eliminate the deminimis exemption for Chinese imports, saying the law is being used to make a blatant end-run around tariffs. “This is a calamity putting U.S. producers and traditional retailers out of business and destroying jobs,” said Charles Benoit, the trade-policy counsel for the coalition.
Keeping costs low
That view is countered by those who say the rule has boosted e-commerce and kept costs lower for consumers. “I wouldn’t characterize it as, ‘People are taking advantage of the system’—it’s just a law that’s been in place and people have a right to use it,” said Lenny Feldman, counsel to the National Customs Brokers and Forwarders Association of America. Terez Universe LLC, a New York-based women’s apparel brand, is among the U.S. companies that has overhauled how it imports Chinese goods. In years past, Terez would place factory orders for leggings, joggers and tank tops based on estimates of consumer demand for certain styles and colors, said Suzanne Farid, the company’s head of supply chain.
To use the de minimis rule, Terez has shifted to a made-to order strategy for its online, direct-to-consumer business— setting production runs based on actual customer orders. The goods, which are packaged and addressed to individual customers, are then shipped directly from Chinese factories by Long Island-based freight forwarder Alba Wheels Up International. Alba Wheels Up bundles the shipments and flies them to the U.S., where they are picked up by couriers for direct delivery to customers, skipping any warehousing or fulfillment in the U.S. “We’re saving more on duties than we’re paying on shipping,” Ms. Farid said.
Terez also sells its apparel at retailers including stores of Neiman Marcus Group Inc. and Nordstrom Inc.; those larger shipments are still subject to tariffs. Avoiding tariffs is particularly attractive for U.S. retailers who sell price-sensitive consumer goods such as ap- parel, handbags, kitchen gadgets and the like, many of which were subject to tariffs even before the trade war.
“If you had a 7% tariff, and then there’s an additional 25% added on top of it? If de mini-mis was a business choice before, now it’s almost an imperative,” said Salvatore Stile II, president of Alba Wheels Up. The U.S. Customs data show a sharp increase in the number of de minimis shipments in the wake of President Donald Trump’s tariffs on China— climbing from 299 million in 2017 to 495 million in 2018, the first full year the tariffs took effect. By 2021, the number had jumped to 771 million shipments, the data show.
The data obtained by the Journal was generated from a Customs and Border Protection database of known de minimis shipments and their declared value. For many packages, especially those that enter the country via the postal service, Customs knows only the items’ weight, not the declared value, meaning the actual value of de minimis could be significantly higher. A Customs spokesman said the data shouldn’t be considered final or endorsed by the agency. He added that Customs is working toward publishing an official set of de minimis statistics.
Former Customs officials say the agency’s focus—rightfully in their view—is screening the packages for illicit goods, such as illegal pharmaceuticals, weapons or counterfeit items. Validating the value of millions of tiny packages a day, or estimating values for packages that only have been weighed, is neither a priority, nor something the agency has resources for, they say. The law allows Chinese companies to export goods directly to the U.S. market from Chinese factories—without the need for any U.S.-based importer or warehouse—as long as shipments are addressed to individual customers and fall below the $800 limit.
Chinese clothing giant Shein, which specializes in fast-fashion—rapidly bringing trendy, low-cost apparel for teens and 20-somethings to market—is among the companies that make use of the exemption. Earnest Research, a data analytics firm for consumer brands, estimated Shein had 30% of the fast-fashion market in the U.S. last year— without selling through their own U.S. storefronts or those of other brands.
The Tijuana route
Companies can also take advantage of the de minimis rule using ocean shipping, which is cheaper than airfreight. That method, which requires some additional steps, has spawned a cottage industry in and around Tijuana, Mexico. Baja Fulfillment got its start with the imposition of the Trump tariffs, said partner Bobby Armijo. His Tecatebased company picks up Chinese imports at the adjacent ports of Los Angeles or Long Beach and loads them into a bonded truck, where the cargo is sealed so that it doesn’t formally enter the U.S. That allows the truck to drive south across the border to Mexico without clearing U.S. Customs. The goods are then taken to one of Mr. Armijo’s three bonded warehouses, avoiding any Mexican tariffs because they don’t technically enter that country’s economy either.
The items remain in the warehouses until U.S. customers place an online order. At that point the item is individually packaged, loaded onto trucks and driven back across the border to San Diego. Mr. Armijo’s firm sends the manifest electronically ahead of time so that when his trucks reach the U.S. border, they clear Customs quickly— no duty required—and can immediately be shipped via the postal service or a courier. He declined to provide exact numbers but says his warehouses fulfill tens of thousands of direct-to-consumer orders a week. The Mexican detour can yield big savings. A $75,000 shipment of women’s tops would normally be charged just over $29,000 in tariffs, as well as additional harbor maintenance fees and merchandise- processing fees. “In some cases, this helps companies survive,” said Mr. Armijo.
The increasing use of the de minimis rule can be seen in the contents of seaborne cargo containers, said Spencer Strader, director of imports at ECU Worldwide, a cargo and freight logistics firm. In the past, those containers tended to all be filled with the same product.
“Now, you’ll open up a container and there’s a thousand individual shipments to a thousand different people in that one 40-foot container, all pre-labeled, possibly USPS, UPS, FedEx or any other final mile provider,” Mr. Strader said. Logistics firms say that the tariff-dodging strategy has also been given momentum by the rise in online shopping, which accelerated during the Covid-19 pandemic as people did more buying from home.
Salvatore Stile II, president of Alba Wheels Up International in his Valley Stream, N.Y., offices. THALIA JUAREZ FOR THE WALL STREET JOURNAL
Terez Universe, a New York-based women’s apparel brand, changed how it imports Chinese goods. THALIA JUAREZ FOR THE WALL STREET JOURNAL
Online sites
People placing orders on Amazon.com Inc.’s Market-place, or the online sites operated by eBay Inc. or Wayfair Inc., generally have no way of knowing if a product from China is being imported as a de minimis shipment. Still, with nearly 800 million shipments entering the U.S. annually as de minimis imports, it’s likely that major U.S. retail brands are using the strategy for online fulfillment from factories in China, said Kim Glas, president of the National Council of Textile Organizations, which represents U.S. apparel makers and supports protective tariffs for American producers. Amazon, eBay and Wayfair declined to comment on the extent to which they or their third-party sellers use de minimis. Amazon’s website, however, contains information on how third-party sellers can comply with the rules.
A number of other importers contacted by the Journal declined to comment on their use of de minimis shipping, reflecting the political sensitivity around tariffs on Chinese imports. The precise nature of goods being imported isn’t known— the paperwork for de minimis shipments doesn’t require importers to use the tariff codes required for other imports— but freight companies say that given the $800 cap on value, most of these goods are consumer items.
In fiscal year 2020, the U.S. imported $618 billion of consumer goods, meaning de minimis shipments were over 10% of that value. The use of de minimis has put a dent in tariff revenues, which go to the U.S. Treasury. The Federal Reserve Bank of New York in 2021 estimated that Treasury loses as much as $10 billion a year in tariffs through tariff strategies like de minimis. New York Fed analysts came up with that estimate by comparing China’s report of how much it exported to the U.S. against U.S. records of how much it imports from China, and found a $55 billion gap they calculated would be explained by tariff avoidance. A measure to bar imports from China receiving the de minimis exemption is in the House version of legislation aimed at helping the U.S. address economic and technological challenges from China, dubbed the America Competes Act, but not in the Senate’s companion bill.
“As long as foreign companies that sell their goods in America are splitting up their shipments to evade tariffs and oversight, American businesses will continue to be put at a competitive disadvantage cost-wise,” said Rep. Earl Blumenauer, (D., Ore.), chairman of the House Ways and Means Trade Subcommittee, who is pushing the measure.
TURNING WINDOWS & GREENHOUSES INTO SOLAR GENERATORS
New industry partnerships accelerate deployment of UbiQD technology
BY KEVIN ROBINSON-AVILA
JOURNAL STAFF WRITER
Microscopic, New Mexico-made “quantum dots” could soon be powering up commercial buildings, boosting greenhouse production and, eventually, even feeding astronauts on the moon. Los Alamos-based Ubiquitous Quantum Dots, or UbiQD Inc., is turning the nanoscale, three-dimensional structures — which measure about 10,000 times smaller than a human hair — into sunlight-harvesting machines to make solar-generating windows, plastic row covers that accelerate greenhouse plant growth and a new type of security ink to protect official documents against counterfeiting.
New industry partnerships accelerate deployment of UbiQD technology
BY KEVIN ROBINSON-AVILA
JOURNAL STAFF WRITER
Microscopic, New Mexico-made “quantum dots” could soon be powering up commercial buildings, boosting greenhouse production and, eventually, even feeding astronauts on the moon. Los Alamos-based Ubiquitous Quantum Dots, or UbiQD Inc., is turning the nanoscale, three-dimensional structures — which measure about 10,000 times smaller than a human hair — into sunlight-harvesting machines to make solar-generating windows, plastic row covers that accelerate greenhouse plant growth and a new type of security ink to protect official documents against counterfeiting.
The company, which launched in 2014, is already deploying its technology in real-world applications, with commercial sales of its quantum-dot-based greenhouse film cover rapidly expanding in the U.S. and Europe, and new windowgeneration pilot projects underway in New Mexico and elsewhere. And now, thanks to new collaborations with two large industry partners, the company is poised to scale up production of its quantum dots for a major thrust into commercial markets over the next two years. In March, UbiQD joined forces with Canadian solar panel manufacturer Heliene Inc., which operates two factories in the U.S., to integrate UbiQD’s quantum-dot film into Heliene solar panels for greenhouses.
And in late April, it signed a new partnership with SWM International — a global leader in the materials industry that makes polymer films for windows — to directly incorporate UbiQD’s quantum dots into SWM’s plastic sheets as a dropin product for manufacturers to create solar-generating windows. Heliene is one of North America’s fastest-growing solar panel manufacturers, and SWM is a publicly traded company with worldwide operations, said UbiQD founder and CEO Hunter McDaniel. “These partnerships provide a new level of validation for UbiQD,” McDaniel told the Journal. “It shows that our quantum dot technology works, and that there are real market opportunities for it.”
Light-bending structures
Commercial use of quantum dots is not new. The nanoscale structures manipulate light in unique ways, absorbing it and emitting it back out in specific colors. They’re used today in everything from transistors and sunscreen to LCD televisions, tablets, smartphones, lasers and even medical applications. But traditionally, they’ve been extremely expensive to make, and they’re usually composed of toxic materials. UbiQD’s product, however, is made through an alternative, inexpensive process that uses low-cost and nontoxic elements.
McDaniel helped develop that new process as a post-doc at Los Alamos National Laboratory. He then licensed it from LANL, along with complementary technology from the Massachusetts Institute of Technology, to make and market next-generation quantum dots for many different applications. From the start, UbiQD set up its own production operation, now housed at a 9,000-square-foot facility in Los Alamos, where the company makes batches of quantum dots for sale to public and private research institutions to explore different applications, often in partnership with UbiQD. That led to its potential application as a security ink, which UbiQD is now developing with partners as an “anticounterfeiting” technique that imbeds quantum dots into documents to make them harder to reproduce, providing unique optical features for things like passports or driver’s licenses. “We continually supply the quantum dots for research and development purposes targeting different niche markets,” McDaniel said. “The security ink is the biggest one.”
Solar-generating windows
Since launching, however, UbiQD has prioritized development of quantum-dottinted windows to provide solar electric generation, potentially converting buildings into self-powering structures. That idea is also not new. But until now, most commercial development has focused on applying photovoltaic cells directly to windows, which is a more complex and expensive process. In contrast, UbiQD aims to imbed quantum dots directly into the windows to absorb solar energy, and then channel the photons to solar cells attached to window frames, making the process simpler and more affordable.
Since 2016, the National Science Foundation has awarded UbiQD about $1.6 million in grants to develop a marketable product. That, along with assistance from the National Renewable Energy Laboratory and other entities, enabled development of UbiQD’s current technology — a plastic film imbedded with quantum dots that’s fitted in between two glass panes as an “interlayer” inside the window. Such double-pane windows with plastic interlayers are used widely by industry as a safety feature. “It makes them more robust,” McDaniel said. “All car windows have them, and they’re often used in hurricane and earthquake zones, because it helps hold the glass together so that, if a window cracks, it won’t necessarily fall onto people. It also dampens noise penetration, which makes it popular in cities.”
UbiQD R&D engineer Cheik Maiga inspects a glass panel that contains UbiQD’s quantum-dot plastic interlayer inside it under UV light at UbiQD’s headquarters in Los Alamos. COURTESY OF UBIQD
A “glazier,” or window installer, attaches an UbiQD solar window at the National Renewable Energy Laboratory in Colorado.
UbiQD window project manager Daniel Korus, left, and a window installer from Capital City Glass & Mirror, inspect UbiQD quantumdot solar windows that were later installed for a pilot project at the Holiday Inn Express in Los Alamos.
UbiQD window project manager Daniel Korus, right, works with a Capital City Glass & Mirror installer to prep an UbiQD solar window for installation at the Holiday Inn Express in Los Alamos.
In November, the company deployed quantum-dot-laden windows for the first time in three pilot projects, including a half dozen windows at NREL in Colorado, another half dozen at the Holiday Inn Express in Los Alamos, and in nearly all the windows at UbiQD’s own facility. The company is now monitoring electric output, assessing performance as sunlight changes throughout the day and during different seasons and varying weather. “So far, there’s been no surprises,” McDaniel said. “They’re performing pretty consistently with all the preliminary modeling we did.” The project is generating enthusiastic feedback. The Holiday Inn now wants the windows installed throughout the building, said Brian Patrick Martin, managing member of the hotel ownership group.
“It’s turning a low-utility part of our building that people look through but don’t really even notice into something much more useful,” Martin told the Journal. “That’s exciting for us as a business, because in the future, it could offset fixed costs for power generation.” Hotel guests are intrigued. “After they see the windows, everyone wants to learn more,” Martin said. “There’s real interest in next-generation energy solutions.” As UbiQD expands the hotel project, it will start testing products that solar windows can power up, such as automated shades that open and close independently, saving energy by shading the room in summertime or opening the blinds in winter for additional heat.
“We’re prototyping motorized shades and other ways of using the window power to operate smart technology,” McDaniel said. “The idea is to start by harnessing the power for local things. But ultimately, the goal is full integration to power up buildings.” More pilot projects are planned. Western Washington University is installing them. And, while not yet officially announced, the U.S. Air Force signed a contract for UbiQD to deploy them on a military base to test its potential to reinforce energy resiliency and efficiency, McDaniel said.
SWM partnership
The new alliance with SWM can pave the way for rapid commercial deployment. That firm is currently merging with another specialty materials manufacturer, creating a $3 billion combined company with business operations in 90 countries. SWM is now working to incorporate UbiQD’s quantum dots directly into SWM’s extrusion process to make plastic interlayers for doublepane windows. The end goal is a scalable, low-cost production process where the quantum dots become an integral part of standard interlayers already used throughout the window industry. “It will be a drop-in solution for manufacturers to integrate the solar-generating interlayers into their window-making operations,” McDaniel said.
UbiQD solar windows arrive at the Holiday Inn Express in Los Alamos for installation in a pilot project there. COURTESY OF UBIQD
The partners expect to conclude the integration process within 18 months, creating an initial prototype this year, a standard product within a year, and then commercial launch in late 2023. “We’re marrying our two technologies together,” McDaniel said. “SWM has all the large infrastructure and equipment needed to do it.” SWM Vice President and General Manager of Films Caio Sedeno said the partnership is mutually beneficial.
“SWM has a track record for delivering demanding and value-added solutions, solving our customers’ mostchallenging problems,” Sedeno said in a statement. “This new relationship extends our technical contributions to the built environment, enabling property owners and developers to push towards netzero.” UbiQD’s go-to-market strategy is still evolving. Supplying quantum-laced interlayers to window makers is the first step, now resolved through the partnership with SWM, which has global distribution chains. But once integrated into double-pane windows, PV cells must still be attached to frames to generate electricity and turn the final product into a fullyfunctioning solar window. “We have yet to determine who makes and sells that final product,” McDaniel said.
UbiQD could establish its own brand, subcontracting manufacturers for PV frame attachments for sale to distributors and installers, or it could license the final product to others to make and sell. “Ideally, production and assembly would become automated for direct production in window factories,” McDaniel said. For the prototypes deployed in pilot projects, UbiQD contracted Albuquerque-based window maker GlazTech Industries. “GlazTech is an example of window factories we could work with to produce final products, but there are similar factories all over the world we could partner with,” McDaniel said.
Agrivoltaic modules
Still, broad deployment of quantum-dot-based solar windows likely won’t begin in commercial buildings, but rather, in greenhouses, thanks to UbiQD’s new partnership with solar panel manufacturer Heliene. And, unlike the solarwindow market, the greenhouse product could provide growers with double the bang for their buck by combining PV generation with a proprietary, red- and orangelight- emitting film that UbiQD began selling in 2018 to boost crop production. Nearly three dozen field trials at greenhouses in seven U.S. states and seven other countries since 2017 have shown that UbiQD’s quantumdot- based film, called UbiGro, can increase crop yields by up to 20% or more. The latest trial results, which UbiQD released in February, demonstrated a 21% improvement in tomato production, a 16% increase in trimmed cannabis yield, 21% more flower clusters in geraniums, 13% enhanced lettuce weight, and up to a 28% boost in strawberry production.
The company developed UbiGro while exploring quantum-dot-based solar generation for greenhouses. The dot-laced film, which is placed above crop rows, shifts sunshine into a red-and-orange light spectrum that mimics late-summerlike sun rays all year round. That’s considered the most potent time of year for plants, because they sense winter coming and grow faster. The company now sells rolls of UbiGro at $3 per square foot, with market uptake steadily expanding. UbiQD doubled its revenue last year to $2.5 million, with about one-third of that coming from UbiGro sales, and the rest from its development partnerships for solar windows and security ink, McDaniel said.
“This year, we’re on track to roughly double our revenue again,” he said. In fact, UbiGro’s potential has caught the interest of NASA, which awarded $825,000 in grants since 2018 to study its ability to boost yields for greenhouse vegetables that astronauts could eventually grow on the moon and Mars.
Now, through the partnership with Heliene, UbiQD will combine its two technologies into a single solargenerating roof for greenhouses that simultaneously shines red and orange light on crops below. Heliene will integrate UbiQD’s quantum-dot interlayer between two sheets of glass with a solar cell in the middle, with a potentially marketable product expected to be ready in 18 months.
UbiQD solar windows at the GlazTech window factory in Albuquerque, which assembled the quantum-dot windows the company has now installed in three pilot projects in New Mexico and Colorado. COURTESY OF UBIQD
An artist’s rendition of a lunar greenhouse using UbiQDs quantum-dot enabled film UbiGro.
McDaniel called it the intersection of technology for “kilowatts and tomatoes.” “We’re combining solar windows with greenhouse films,” he said. “We’re creating a new line of products right at the intersection of the two.” For Heliene, the partnership can accelerate that company’s strategic thrust into “agrivoltaics,” where solar generation is employed in agricultural operations, said Heliene CEO Martin Pochtaruk. “As energy costs continue to rise, the controlled environment agriculture industry will have to utilize energy sources more efficiently,” Pochtaruk said in a statement. “Greenhouses and photovoltaics generate hundreds of billions of dollars of value from sunlight, and our plan is that with our agrivoltaic modules, the whole will be greater than the sum of the parts.”
To date, UbiQD has raised more than $14 million in private equity and grant funding to pursue different market applications for its quantum dots. It currently employs 26 people full time, 24 of them at its headquarters in Los Alamos.
It sounds cool and all, but it kind of raises my "greenwashing" hackles. They quote to two significant figure the speculative numbers concerning the improvements to greenhouse yields, but do not give the core numbers concerning their main product, electricity producing windows. How much do they cost, and how much electricity do they produce? Why do they hide these figures, while giving others that are much less relevant?
The greenhouse products have been used for several years ad they have good data on the effect. The window generating products are too new to have data concerning cost and generating utility. The greenhouse results came from using film based products. The window glass generating manufacturing process is just underway. Prototypes are not usually a good way to measure final costs. Give them time. Rome wasn't built in a day....
Lexicus
Deity
They are not poor enough yet.
The 50 Richest People Have Lost A Combined $563 Billion This Year
BY JOSEPH DE AVILA
The top 50 richest people in the world have lost more than half a trillion dollars on paper this year, a stunning loss of wealth that exceeds the gross domestic product of Sweden and is greater than the market caps of all but six companies in the S& P 500. The 50 wealthiest people, which include Elon Musk, Jeff Bezos, Bill Gates and Warren Buffett, have had a combined $563 billion in net worth evaporate this year through May 22, according to the Bloomberg Billionaires Index, a ranking updated daily of the richest people in the world. The drop comes as the stock market flirts with its first bear market since the beginning of the pandemic.
Mr. Musk, Tesla Inc.’s chief executive and the world’s richest man, currently has a net worth of $201 billion. On paper, he has lost $69.1 billion so far this year, the most of any billionaire currently on the top 50 list, according to the index. He is in the midst of buying social-media company Twitter Inc. for $44 billion, a deal that he has said is on hold.
Amazon.com Inc. founder Mr. Bezos’s net worth has fallen by $61.1 billion and Bernard Arnault, France’s wealthiest man and chief executive of LVMH Moët Hennessy Louis Vuitton SE, has had $55.2 billion in wealth erased. Mr. Bezos still has a net worth of $131 billion and Mr. Arnault is worth $123 billion.
Mr. Gates, co-founder of Microsoft Corp., is currently worth $116 billion but has lost $21.7 billion in wealth this year. Berkshire Hathaway Inc.’s Mr. Buffett rounds out the top five with a net worth of $110 billion. Unlike the four people richer than him, his net worth has risen this year by $1.2 billion. The Bloomberg Billionaires Index measures personal wealth based on changes in markets, the economy and other reporting.
The losses for the billionaires come as a months long selloff in the stock market has picked up speed and has begun spreading beyond technology shares. Consumer-staples companies, which had dodged most of the damage, have started taking losses. For the year, the S& P 500 has fallen about 17%, while the Nasdaq Composite has dropped 26%. Other notable people who have had sharp declines include Meta Platforms Inc. founder and Chief Executive Mark Zuckerberg, who has seen a $54.1 billion loss this year. Google co-founder Larry Page has lost $29 billion. Changpeng Zhao, founder of cryptocurrency exchange Binance, now ranks 113th on the list after losing $80.9 billion so far this year, the most of any individual that the Bloomberg Billionaires Index tracks. His drop comes as cryptocurrencies have also been hard hit over the past few months. The stock market slide also reversed the gains the world’s wealthiest people saw during the start of the pandemic, when a billionaire was created every 30 hours, according to a new report released Monday by antipoverty group Oxfam International. The number of billionaires in the world increased by 573 from March 2020 to March 2022, raising the globe’s grand total to 2,668, according to the report.
The collective wealth of billionaires rose more during the first two years of the pandemic than they did between the collective years between 1987 and 2010, according to the report. And the total wealth of the world’s billionaires is now equivalent to 13.9% of global GDP, a threefold increase from 2000.
Paper losses are mounting for Jeff Bezos, Bill Gates and Elon Musk, among others ranked by the Bloomberg Billionaires Index. ZUMA PRESS; AP; BRAZIL’S MINISTRY OF COMMUNICATION/ AFP/ GETTY IMAGES
The 50 Richest People Have Lost A Combined $563 Billion This Year
BY JOSEPH DE AVILA
The top 50 richest people in the world have lost more than half a trillion dollars on paper this year, a stunning loss of wealth that exceeds the gross domestic product of Sweden and is greater than the market caps of all but six companies in the S& P 500. The 50 wealthiest people, which include Elon Musk, Jeff Bezos, Bill Gates and Warren Buffett, have had a combined $563 billion in net worth evaporate this year through May 22, according to the Bloomberg Billionaires Index, a ranking updated daily of the richest people in the world. The drop comes as the stock market flirts with its first bear market since the beginning of the pandemic.
Mr. Musk, Tesla Inc.’s chief executive and the world’s richest man, currently has a net worth of $201 billion. On paper, he has lost $69.1 billion so far this year, the most of any billionaire currently on the top 50 list, according to the index. He is in the midst of buying social-media company Twitter Inc. for $44 billion, a deal that he has said is on hold.
Amazon.com Inc. founder Mr. Bezos’s net worth has fallen by $61.1 billion and Bernard Arnault, France’s wealthiest man and chief executive of LVMH Moët Hennessy Louis Vuitton SE, has had $55.2 billion in wealth erased. Mr. Bezos still has a net worth of $131 billion and Mr. Arnault is worth $123 billion.
Mr. Gates, co-founder of Microsoft Corp., is currently worth $116 billion but has lost $21.7 billion in wealth this year. Berkshire Hathaway Inc.’s Mr. Buffett rounds out the top five with a net worth of $110 billion. Unlike the four people richer than him, his net worth has risen this year by $1.2 billion. The Bloomberg Billionaires Index measures personal wealth based on changes in markets, the economy and other reporting.
The losses for the billionaires come as a months long selloff in the stock market has picked up speed and has begun spreading beyond technology shares. Consumer-staples companies, which had dodged most of the damage, have started taking losses. For the year, the S& P 500 has fallen about 17%, while the Nasdaq Composite has dropped 26%. Other notable people who have had sharp declines include Meta Platforms Inc. founder and Chief Executive Mark Zuckerberg, who has seen a $54.1 billion loss this year. Google co-founder Larry Page has lost $29 billion. Changpeng Zhao, founder of cryptocurrency exchange Binance, now ranks 113th on the list after losing $80.9 billion so far this year, the most of any individual that the Bloomberg Billionaires Index tracks. His drop comes as cryptocurrencies have also been hard hit over the past few months. The stock market slide also reversed the gains the world’s wealthiest people saw during the start of the pandemic, when a billionaire was created every 30 hours, according to a new report released Monday by antipoverty group Oxfam International. The number of billionaires in the world increased by 573 from March 2020 to March 2022, raising the globe’s grand total to 2,668, according to the report.
The collective wealth of billionaires rose more during the first two years of the pandemic than they did between the collective years between 1987 and 2010, according to the report. And the total wealth of the world’s billionaires is now equivalent to 13.9% of global GDP, a threefold increase from 2000.
Paper losses are mounting for Jeff Bezos, Bill Gates and Elon Musk, among others ranked by the Bloomberg Billionaires Index. ZUMA PRESS; AP; BRAZIL’S MINISTRY OF COMMUNICATION/ AFP/ GETTY IMAGES
Lexicus
Deity
They are not poor enough yet.
The 50 Richest People Have Lost A Combined $563 Billion This Year
BY JOSEPH DE AVILA
The top 50 richest people in the world have lost more than half a trillion dollars on paper this year, a stunning loss of wealth that exceeds the gross domestic product of Sweden and is greater than the market caps of all but six companies in the S& P 500. The 50 wealthiest people, which include Elon Musk, Jeff Bezos, Bill Gates and Warren Buffett, have had a combined $563 billion in net worth evaporate this year through May 22, according to the Bloomberg Billionaires Index, a ranking updated daily of the richest people in the world. The drop comes as the stock market flirts with its first bear market since the beginning of the pandemic.
Mr. Musk, Tesla Inc.’s chief executive and the world’s richest man, currently has a net worth of $201 billion. On paper, he has lost $69.1 billion so far this year, the most of any billionaire currently on the top 50 list, according to the index. He is in the midst of buying social-media company Twitter Inc. for $44 billion, a deal that he has said is on hold.
Amazon.com Inc. founder Mr. Bezos’s net worth has fallen by $61.1 billion and Bernard Arnault, France’s wealthiest man and chief executive of LVMH Moët Hennessy Louis Vuitton SE, has had $55.2 billion in wealth erased. Mr. Bezos still has a net worth of $131 billion and Mr. Arnault is worth $123 billion.
Mr. Gates, co-founder of Microsoft Corp., is currently worth $116 billion but has lost $21.7 billion in wealth this year. Berkshire Hathaway Inc.’s Mr. Buffett rounds out the top five with a net worth of $110 billion. Unlike the four people richer than him, his net worth has risen this year by $1.2 billion. The Bloomberg Billionaires Index measures personal wealth based on changes in markets, the economy and other reporting.
The losses for the billionaires come as a months long selloff in the stock market has picked up speed and has begun spreading beyond technology shares. Consumer-staples companies, which had dodged most of the damage, have started taking losses. For the year, the S& P 500 has fallen about 17%, while the Nasdaq Composite has dropped 26%. Other notable people who have had sharp declines include Meta Platforms Inc. founder and Chief Executive Mark Zuckerberg, who has seen a $54.1 billion loss this year. Google co-founder Larry Page has lost $29 billion. Changpeng Zhao, founder of cryptocurrency exchange Binance, now ranks 113th on the list after losing $80.9 billion so far this year, the most of any individual that the Bloomberg Billionaires Index tracks. His drop comes as cryptocurrencies have also been hard hit over the past few months. The stock market slide also reversed the gains the world’s wealthiest people saw during the start of the pandemic, when a billionaire was created every 30 hours, according to a new report released Monday by antipoverty group Oxfam International. The number of billionaires in the world increased by 573 from March 2020 to March 2022, raising the globe’s grand total to 2,668, according to the report.
The collective wealth of billionaires rose more during the first two years of the pandemic than they did between the collective years between 1987 and 2010, according to the report. And the total wealth of the world’s billionaires is now equivalent to 13.9% of global GDP, a threefold increase from 2000.
Paper losses are mounting for Jeff Bezos, Bill Gates and Elon Musk, among others ranked by the Bloomberg Billionaires Index. ZUMA PRESS; AP; BRAZIL’S MINISTRY OF COMMUNICATION/ AFP/ GETTY IMAGES
Odd framing kinda. https://inequality.org/great-divide/updates-billionaire-pandemic/
They're still up 1.7 trillion from the start of the pandemic.
WSJ's take.
At the Holiday Inn Express and Suites in Los Alamos, New Mexico, the windows themselves generate electricity. But guests are unaware it’s happening.
“The beauty of our technology is that it doesn’t look any different than a regular window,” says Hunter McDaniel, founder and CEO of UbiQD, the company that developed the windows. They’re made with what are called quantum dots, tiny particles that absorb sunlight and convert it into a glow outside the visible spectrum of light. That glow is then routed to solar cells at the edge of the window. The hotel windows are part of a pilot project, and the technology is not yet commercially available, but McDaniel expects to start selling the windows this year.
He says they’re an ideal solution for urban areas. “If you go to a city and you look around, there’s nowhere to put solar panels,” he says. “On the rooftops, there’s HVAC systems, leisure spaces.” And the roofs are small compared to the height of the buildings. But the sides of tall buildings are usually glass, so solar windows could fit in seamlessly. And McDaniel says the windows can produce up to 40% of a building’s typical energy needs, so they’re a promising way to help reduce the climate impact of city buildings.
https://yaleclimateconnections.org/2022/02/these-holiday-inn-windows-have-a-secret-job/
Bestbank Tiger
Deity
Start of the pandemic is odd framing. You're using an artifical low point. If you want to be mad, be mad about corporate profits because those are "real" money that came out of people's pockets.
Also a strange flex to be happy about them losing paper wealth. That didn't get transferred to working people. It vanished into thin air.
Lexicus
Deity
1) i'm not happy about them losing wealth, i don't care
2) right before the start of the pandemic was a growth period, not an artificial low point
Davos is dead
Just when you thought you would never see again the spectacle of private jets landing in the Swiss mountain town of Davos for the rich and powerful to unironically discuss “solutions” to climate change and inequality, the World Economic Forum is back.
They’re meeting face to face for the first time since January 2020. Did you miss it? No, me neither.
Policy choices made by governments and international institutions throughout the pandemic have fallen woefully short of protecting people from the impact of multiple crises. Spiralling inflation, sky-rocketing energy bills and fuel prices, as well as high and still rising food prices, spelled disaster for so many. But the richest few, who continued to increase their wealth in the past two years, are still benefitting from the crisis. As a result, questions are being raised on the morality of an economic system that has failed to help the masses and instead supercharged inequality during a global health emergency.
It’s somewhat unbelievable that amid all this, finance ministers and multinational CEOs are taking some time out to exchange warm words with fellow “captains of industry” in a Swiss mountain town. But they are – as they have done for 51 years.
People, however, are no longer fooled by the Davos talk of equality, transparency, respect and diversity. They are well aware that those who benefitted and continue to benefit from the pandemic that left them struggling to put food on their table – such as Pfizer CEO Albert Bourla, who made an eye-watering $24.3m in 2021 and is attending Davos – are not interested in the systemic changes needed to tackle inequality.
Indeed, more and more people are questioning what their leaders are doing in unaccountable spaces like Davos when they could be making policy choices that would address pressing problems.
In Zambia, for example, President Hakainde Hichilema is finding an increasingly frustrated citizenry asking who benefits from his economic policies, such as his recent move to lower the corporate taxation rate from 35 percent to 30 percent.
Zambians are asking: In a mineral-rich country with huge copper reserves selling at record prices, why are the vast majority of people still living in crushing poverty? Why are we expected to bear the pain of increasing food and fuel prices? Why are the details of an upcoming IMF loan agreement, expected to usher in more devastating austerity, being kept hidden from us?
Indeed, while IMF head Kristalina Georgieva, mining company bosses, and finance ministers rub socially-distanced shoulders and share canapes in Davos, people will not be celebrating. They will not be celebrating because they know the solutions to their myriad problems do not lie with company bosses, or in Davos.
Not because global solutions aren’t needed – they are an important part of the picture. But while many structural solutions to inequality do require global action, the radical changes needed on both the domestic and international fronts are not in the Davos wheelhouse because they threaten elite interests.
The World Economic Forum is not accountable to anyone but itself. Serious tax reform proposals that are gaining momentum, such as a Global Asset Register (the proposal to create a comprehensive international registry of all wealth and assets), or the creation of a UN tax convention, will not find political backing at Davos. A much-needed reform of multilateralism cannot and will not begin in Davos.
I have not quoted it all, but in the end more than half is above so you may be better off going to the source article.They’re meeting face to face for the first time since January 2020. Did you miss it? No, me neither.
Policy choices made by governments and international institutions throughout the pandemic have fallen woefully short of protecting people from the impact of multiple crises. Spiralling inflation, sky-rocketing energy bills and fuel prices, as well as high and still rising food prices, spelled disaster for so many. But the richest few, who continued to increase their wealth in the past two years, are still benefitting from the crisis. As a result, questions are being raised on the morality of an economic system that has failed to help the masses and instead supercharged inequality during a global health emergency.
It’s somewhat unbelievable that amid all this, finance ministers and multinational CEOs are taking some time out to exchange warm words with fellow “captains of industry” in a Swiss mountain town. But they are – as they have done for 51 years.
People, however, are no longer fooled by the Davos talk of equality, transparency, respect and diversity. They are well aware that those who benefitted and continue to benefit from the pandemic that left them struggling to put food on their table – such as Pfizer CEO Albert Bourla, who made an eye-watering $24.3m in 2021 and is attending Davos – are not interested in the systemic changes needed to tackle inequality.
Indeed, more and more people are questioning what their leaders are doing in unaccountable spaces like Davos when they could be making policy choices that would address pressing problems.
In Zambia, for example, President Hakainde Hichilema is finding an increasingly frustrated citizenry asking who benefits from his economic policies, such as his recent move to lower the corporate taxation rate from 35 percent to 30 percent.
Zambians are asking: In a mineral-rich country with huge copper reserves selling at record prices, why are the vast majority of people still living in crushing poverty? Why are we expected to bear the pain of increasing food and fuel prices? Why are the details of an upcoming IMF loan agreement, expected to usher in more devastating austerity, being kept hidden from us?
Indeed, while IMF head Kristalina Georgieva, mining company bosses, and finance ministers rub socially-distanced shoulders and share canapes in Davos, people will not be celebrating. They will not be celebrating because they know the solutions to their myriad problems do not lie with company bosses, or in Davos.
Not because global solutions aren’t needed – they are an important part of the picture. But while many structural solutions to inequality do require global action, the radical changes needed on both the domestic and international fronts are not in the Davos wheelhouse because they threaten elite interests.
The World Economic Forum is not accountable to anyone but itself. Serious tax reform proposals that are gaining momentum, such as a Global Asset Register (the proposal to create a comprehensive international registry of all wealth and assets), or the creation of a UN tax convention, will not find political backing at Davos. A much-needed reform of multilateralism cannot and will not begin in Davos.
Deflation risks aside, no, it does transfer. Paper wealth doesn't 'vanish'. Their wealth means that they can more easily out-bid me for your services, which means that both you and I work for them rather than each other. With fiat, there is no trickle down. It's all demand-side effects.
Bestbank Tiger
Deity
I didn't benefit. Didn't get a bonus on my paycheck. Didn't get lower prices anywhere. Didn't see my portfolio go up.
It isn't a real number - it's based on unrelated third parties buying and selling an asset and multiplying the price by how much of the asset someone owns.
We should be mad about Amazon's profits. Those came from underpaying and endangering employees and taking advantage of lockdowns. Their stock price isn't the problem (in fact, with a PE ratio of 51 the stock price is higher than what the financials would justify).
Bank of England: We cannot actually do anything about rising prices, because they are caused by external forces. Therefore we should restrict pay rises.
Does this make any sense at all?
Andrew Bailey on the cause of inflation:
Does this make any sense at all?
Andrew Bailey on the cause of inflation:
Andrew Bailey warned of a “very big income shock” to households, and admitted feeling “helpless” in the face of surging inflation.
About 80 per cent of the forces pushing up inflation in the UK are being driven by global circumstances, Mr Bailey said. “There’s not a lot we can do about 80 per cent of it,” he added. “We have to recognise the reality of the situation we face.”
Another factor, included in the remaining 20 per cent of issues affecting price growth, was the reduction in the workforce post-pandemic.
“The scale and persistence of the fall has been very unusual,” Mr Bailey said, adding: “These are very fine, and pretty hard, judgements to make, I have to say.”
Andrew Bailey on the response to inflation:About 80 per cent of the forces pushing up inflation in the UK are being driven by global circumstances, Mr Bailey said. “There’s not a lot we can do about 80 per cent of it,” he added. “We have to recognise the reality of the situation we face.”
Another factor, included in the remaining 20 per cent of issues affecting price growth, was the reduction in the workforce post-pandemic.
“The scale and persistence of the fall has been very unusual,” Mr Bailey said, adding: “These are very fine, and pretty hard, judgements to make, I have to say.”
Andrew Bailey said he wanted to see “quite clear restraint” in the annual wage-bargaining process between staff and their employers to help prevent an upward spiral taking hold.
Bailey said restricting wage growth was vital for keeping a grip on inflation, telling the BBC’s Today programme it would help to stabilise the economy after the turbulence of Covid-19.
“I’m not saying nobody gets a pay rise, don’t get me wrong. But what I am saying is, we do need to see restraint in pay bargaining, otherwise it will get out of control,” he said.
Open Democracy comments on the issue:Bailey said restricting wage growth was vital for keeping a grip on inflation, telling the BBC’s Today programme it would help to stabilise the economy after the turbulence of Covid-19.
“I’m not saying nobody gets a pay rise, don’t get me wrong. But what I am saying is, we do need to see restraint in pay bargaining, otherwise it will get out of control,” he said.
Despite acknowledging that companies raising prices can be a key driver of this spiral, to date Bailey has not called for businesses to restrict price increases or rein in soaring profits. Instead, the governor has repeatedly focused his attention on squeezing real wages, which remain lower today than they were in 2008. In essence, the Bank of England governor is openly arguing that household incomes must be sacrificed to fight inflation, so that corporate profits can be maintained. In doing so, the supposedly non-political governor has ventured into the world of distribution, which is supposed to be the preserve of his political paymasters.
Then, earlier this month, the Bank of England’s monetary policy committee hiked interest rates to 1% – their highest point in 13 years. While expected to do little to curb inflation, the move risks exacerbating the cost of living crisis further by making it even more expensive for households to service their debts. Many economists also worry that raising rates too quickly risks triggering a severe recession.
Why would the bank run this risk under the current circumstances, you might ask? The answer is that it is desperate to maintain its ‘credibility’, a term that has been repeatedly used as a stick to beat the bank with since it became independent.
But when central bankers talk about maintaining ‘credibility’, they are not talking about looking credible to you and I, but to the City of London. Whenever Threadneedle Street fails to toe the line of City analysts, the latter often respond by declaring that the ‘credibility’ of the bank’s independence from government is under threat. “Credibility is not infinite and cannot be taken for granted,” as Michael Saunders, a member of the bank’s monetary policy committee, recently put it.
Seeing the Bank of England side with finance capital over households during a cost of living crisis might seem shocking, but it is not new. Central banks are not – and have never been – apolitical technocrats. Inflation is always political, and since becoming independent the Bank of England has regularly privileged the interests of investors and asset owners over workers. But whereas historically these decisions have been concealed behind a veil of technocratic jargon, the cost of living crisis has brought them into sharp focus. And what people now see is a central bank that seems determined to make the cost of living crisis worse, not better. They see a publicly owned body that is quite clearly not on their side.
None of this is to say that the governments are powerless to fight inflation. But doing so will likely require utilising a much wider range of tools than the Bank of England has available in its armoury, including price controls, industrial policy, competition policy and changes to tax and welfare. This in turn will require coordinated action among a range of government departments and agencies, including energy regulators, competition authorities and finance ministries, as well as central banks.
Then, earlier this month, the Bank of England’s monetary policy committee hiked interest rates to 1% – their highest point in 13 years. While expected to do little to curb inflation, the move risks exacerbating the cost of living crisis further by making it even more expensive for households to service their debts. Many economists also worry that raising rates too quickly risks triggering a severe recession.
Why would the bank run this risk under the current circumstances, you might ask? The answer is that it is desperate to maintain its ‘credibility’, a term that has been repeatedly used as a stick to beat the bank with since it became independent.
But when central bankers talk about maintaining ‘credibility’, they are not talking about looking credible to you and I, but to the City of London. Whenever Threadneedle Street fails to toe the line of City analysts, the latter often respond by declaring that the ‘credibility’ of the bank’s independence from government is under threat. “Credibility is not infinite and cannot be taken for granted,” as Michael Saunders, a member of the bank’s monetary policy committee, recently put it.
Seeing the Bank of England side with finance capital over households during a cost of living crisis might seem shocking, but it is not new. Central banks are not – and have never been – apolitical technocrats. Inflation is always political, and since becoming independent the Bank of England has regularly privileged the interests of investors and asset owners over workers. But whereas historically these decisions have been concealed behind a veil of technocratic jargon, the cost of living crisis has brought them into sharp focus. And what people now see is a central bank that seems determined to make the cost of living crisis worse, not better. They see a publicly owned body that is quite clearly not on their side.
None of this is to say that the governments are powerless to fight inflation. But doing so will likely require utilising a much wider range of tools than the Bank of England has available in its armoury, including price controls, industrial policy, competition policy and changes to tax and welfare. This in turn will require coordinated action among a range of government departments and agencies, including energy regulators, competition authorities and finance ministries, as well as central banks.
Game theory and US China trade relations from Politico
A Forecasting Model Used by the CIA Predicts a Surprising Turn in U.S.-China Relations
The administration could soon lower tariffs if some power plays in Washington and Beijing take flight.
More at the link.
https://www.politico.com/news/magaz...ory-predicts-biden-tariffs-china-cia-00035104
A Forecasting Model Used by the CIA Predicts a Surprising Turn in U.S.-China Relations
The administration could soon lower tariffs if some power plays in Washington and Beijing take flight.
More at the link.
https://www.politico.com/news/magaz...ory-predicts-biden-tariffs-china-cia-00035104
Pakistan's answer to pressure on foreign currency reserves: Drink less tea
People in Pakistan have been asked to reduce the amount of tea they drink to keep the country's economy afloat.
Sipping fewer cups a day would cut Pakistan's high import bills, senior minister Ahsan Iqbal said.
Pakistan is the world's largest importer of tea, buying in more than $600m (£501m) worth last year.
"I appeal to the nation to cut down the consumption of tea by one to two cups because we import tea on loan," Mr Iqbal said, according to Pakistani media.
Business traders could also close their market stalls at 20:30 to save electricity, he suggested.
The request to reduce tea drinking has gone viral on social media, with many doubting the country's serious financial problems can be addressed by cutting out the caffeinated beverage.
Sipping fewer cups a day would cut Pakistan's high import bills, senior minister Ahsan Iqbal said.
Pakistan is the world's largest importer of tea, buying in more than $600m (£501m) worth last year.
"I appeal to the nation to cut down the consumption of tea by one to two cups because we import tea on loan," Mr Iqbal said, according to Pakistani media.
Business traders could also close their market stalls at 20:30 to save electricity, he suggested.
The request to reduce tea drinking has gone viral on social media, with many doubting the country's serious financial problems can be addressed by cutting out the caffeinated beverage.
EnglishEdward
Deity
And they live right next door to India that produces yonks of delightful tea.
