Random assorted charts (ex-Feds, surprising imports, Temu exemption, more)
Where do federal employees go, after they go ex-fed? What's the worst state to have an injury that isn't your own? Those and other mysteries, revealed
offramps for Feds
mystery importers for D.C. and Idaho
closing the Temu exemption, aka Sec. 321 de minimis import exemption
the worst state to have an accident that isn’t your own
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Random assorted charts (fed ex-workers, top importers, Temu exemption, and the worst states)
Busy day, so keeping it light and airy, mostly
Offramps for federal employees
Where do federal employees go when they leave the government?
They go to the University of California, apparently:
Off-ramps for federal employees include a who’s who of fancy universities, defense contractors, and management consultants.
No surprises, there. Universities train the technocrats to spend the money with the management consultants and defense contractors. Or something like that 😉. Of course, the biggest off-ramp is “self-employed,” which I would assume means a consultant of some sort, who also specializes in spending government money.
Don’t hate the player, hate the game.
Revelio makes the additional point that government offramps haven’t been in expansion mode of late (but of course, neither has anyone else):
Really only Georgetown and Deloitte stand out as potential employers.
Anyways, nothing profound here, but it’s a fun chart. It’s of course meant to be topical, in light of cuts to the federal workforce, and all that, but I wouldn’t read too much into it.
D.C. loves its Australian goat meat
You know what else is amusing (and falls under the category of random charts)?
Apparently D.C.’s greatest import partner is . . . Australia.
Australia is the source of 25% of D.C.’s imports.
Must be all the sheep and goat meat that Australia is famous for.
Also, if you guessed that Malaysia is Idaho’s #1 trade partner, then I commend you. Apparently Idaho (via Micron) imports a lot of semiconductor components from Malaysia. The more you know.
Closing the Temu loophole
Speaking of imports, longer-term readers know that Buying Cheap Tchotchkes on the Internet is one of Random Walk’s favorite sub-themes of Almighty Cautious Consumerism.
The gist of it is that e-commerce has been a key driver behind otherwise middling retail growth, and buying cheap knick-knacks (and paddywhacks?) from China has been a key driver behind e-commerce growth.
Not the only driver, for sure—value and discounts are winners wherever consumers can find them—but Temu, Shein, TikTok Shop, and more recently, Amazon’s Haul, have been a big part of the story. These marketplaces sell implausibly cheap stuff (without the 2-day shipping), and consumers absolutely love it.
Anyways, a big part of their story is coming to an end.
The so-called Sec. 321 “de minimis exemption”—which raised the duty-free threshold from $200 to $800—is officially over (at least with respect to shipments originating in China, Mexico and Canada). Sec. 321 allowed crafty retailers to import goods from China (either directly, or more recently, from Mexico) without paying any import taxes, provided the shipments were under $800.
If you don’t pay any import taxes, then you can pass the savings on to your customers.
As you might imagine, importers optimized for that pricing arb very quickly:
Census estimates that the number of Sec. 321 shipments went from 200 to one billion in the seven years since it’s been passed.
That’s a five-fold increase in total “de minimis” shipments. Census hasn’t released the 2024 count, but extrapolating outwards, the number of shipments would have reached nearly 1.4B in 2024.
The total value of Sec. 321 shipments has exploded, as well:
The value of imports sextupled, going from ~$9B to $54.5B (and ~$64B in 2024, if you extrapolate from the trend).
That’s an awful lot of duty-free imports.
I mean, it’s so many that it’s almost hard to believe:
Currently, de minimis shipments account for 92% of all cargo entering the U.S. and that figure is growing in epic proportions. CBP processes approximately 4 million de minimis shipments a day, up from 2.8 million last year.
According to the US CPB, Sec. 321 accounts for 92% of all cargo entering the US, reflecting a 40% daily increase from last year alone.
92%. That’s incredible.
The average value of each of these packages is only ~$50-$60, so you can imagine the flood of small packages that CPB has to sift through.
Average exempt package value peaked at ~$111, but has come all the way down to ~$50 a package.
As I said, buying cheap tchotchkes on the internet, is all the rage.
Now, not all Sec. 321 shipments are Temu and Shein (or e-commerce), and not all Temu and Shein sales rely on the de minimis exception. Temu, etc. have pushed to partner with more US-based retailers, which (somehow) makes it less reliant on Sec. 321.1
But, it’s still a pretty big part of the e-commerce picture (and not just for Chinese e-commerce), but Shopify SHOP 0.00%↑too:
Twenty-five percent of the largest Shopify stores take advantage of the de minimis exemption for a portion of their business, particularly to avoid high tariffs on imports from China, according to Aaron Rubin, the founder and CEO of ShipHero, a warehouse management software company that serves 10% of all Shopify Plus stores globally.
25% of the largest Shopify stores “take advantage” of the exemption.
And a slightly different version from Ryan Petersen of Flexport
“30 of the top 100 American brands on Shopify” fulfill in Mexico to avoid US duties.
So, there’s a lot of retailers that have been selling loads of cheap stuff, partly by shipping it $800 (or less) at a time.
That pricing advantage is no more.
The worst place to have an accident (that isn’t yours)
One last chart before we go.
The American Property Casualty Insurance Association (APCIA) put together a super-long presentation, full of lots of data and case studies, on how regulators break insurance and harm consumers.
It’s worth a gander, but this is old territory for Random Walk, so I’m not going to rehash it here. Suffice it to say that obviously everything in the report is 100% correct, even if it is sponsored by the industry . . . because what else would price controls do besides break things?
Anyways, there is one chart that I pulled out because it’s amusing.
Behold, the worst place to have an accident (that isn’t yours):
Nevada and Louisiana have the most legal advertising spend per lawyer in the country.
Florida and Alabama are close on their heels.
Lawyers-who-advertise tend to be personal injury lawyers (and their variants), aka ambulance chasers. If they’re advertising a lot, it presumably means there’s ROI in those paid ads.2
If there is ROI in paid ads for personal injury lawyers, well, you better hope that no one gets injured on your watch.
Fin.
Other links
China’s weird chip surplus, explained. China has both chip surpluses and shortages. Why? It’s a question of model training v. inference.
Industry level productivity changes. Chicago Fed looks at which industries are driving the “productivity” gains (and how they differ from before).
Waymo v. Uber. Some thoughts on the nascent frenemy relationship.
Malaysia has been a hotspot for data centers, but the country is planning an upcharge. Is this a tariff?
The full story behind the FAA hiring scandal. It sure seems like sometime in 2013 the FAA began systematically discriminating against qualified candidates because they had the wrong skin color, while giving preferences to less-qualified candidates because they had the right skin color. Not good.
Previously, on Random Walk
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Maybe if the goods are imported to a domestic warehouse, and then sold by a domestic retailer, they are not subject to import taxes? As opposed to selling direct to consumer and then shipping from China, which would be subject to import taxes. I’m not sure.
The APCIA’s point is that those states—Florida especially—have terrible liability and burden-shifting laws that make losses far more expensive than they should be for insurers (but really profitable for lawyers).
For those young whippersnappers mystified by the "paddywhack" reference, it's an English children's rhyming/counting song, first verse:
This old man, he played one,
He played knick-knack on my thumb.
With a knick-knack paddywhack,
Give a dog a bone.
This old man came rolling home.
Second verse, worse than the first, going to two and shoe . . . and on through the numbers till it's almost as bad as the 12 Days of Christmas.