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    Costco and Sam’s Club’s smaller rival BJ’s Wholesale will open more clubs in Southeast

    BJ’s Wholesale is opening a dozen clubs in the U.S. this year, as it pushes into new regions of the country.
    The Massachusetts-based retailer has a heavier emphasis on groceries and carries smaller sizes, such as a single loaf of bread or gallon of milk along with bulk items.
    Warehouse club rivals Costco and Walmart-owned Sam’s Club are also opening more locations.

    A BJ’s Wholesale Club is shown in Falls Church, Virginia, May 23, 2023.
    Win Mcnamee | Getty Images

    BJ’s Wholesale Club said Wednesday that it will open four clubs in the Southeast and one in the Midwest this year, as it tries to expand and attract members in other parts of the country in a competitive membership warehouse market.
    The new stores will open this fiscal year in Maryville, Tennessee; Myrtle Beach, South Carolina; Palm Coast and West Palm Beach, Florida; and Carmel, Indiana. The company plans to open a dozen new clubs this fiscal year, including an already announced club in Louisville, Kentucky.

    The smaller rival of Costco and Walmart-owned Sam’s Club is just the latest warehouse club to share its goals for expansion. Sam’s Club said in early 2023 that it would open more than 30 stores in the U.S. over a five-year period. Earlier this month, Costco said on an earnings call that it expects to open 30 new clubs globally in its fiscal year, including two relocations. Twenty-two are planned for the U.S.
    Their moves come as value-focused retailers, such as off-price chains, drive store growth in the U.S. The retailers that have announced the most new locations so far this calendar year are Dollar General, Burlington and Aldi, according to Coresight Research, a retail advisory firm that tracks openings and closures.
    Similarly, club stores resonate with budget shoppers because they emphasize getting more for less.

    BY THE NUMBERS: Warehouse clubs

    BJ’s
    Clubs in the U.S.: 244
    Membership fee: $55 per year or $110 for higher tier
    Costco
    Clubs in the U.S.: 603, including Puerto Rico
    Membership fee: $60 per year or $120 for higher tier
    Sam’s Club
    Clubs in the U.S.: 599, including Puerto Rico
    Membership fee: $50 or $110 for higher tier
    Source: Company websites and most recent earnings releases

    BJ’s has a smaller reach than its club rivals. Most of the Marlborough, Massachusetts-based retailer’s clubs have been concentrated on the East Coast. Its expansion will bring it to 21 states compared with Costco, which had clubs in 46 states, Washington D.C., and Puerto Rico as of Sept. 3, the end of its fiscal year. Sam’s Club has locations in 44 states and in Puerto Rico.
    Yet BJ’s has been in growth mode since 2016, when it stepped up efforts to break into new markets, said Bill Werner, the retailer’s executive vice president of strategy and development. It has opened 27 new clubs and entered four new states over the past five years: Tennessee, Alabama, Indiana and Michigan. It opened seven new clubs last fiscal year.
    It plans to open 10 to 12 clubs each year going forward, Werner said.
    Yet BJ’s will have to convince customers to buy a membership, which could be a challenge if it’s the second or third club in a customer’s backyard.
    Greg Melich, a retail analyst for Evercore ISI, said BJ’s can stand out with its emphasis on grocery. It has nearly double the number of items of club competitors, including many more fridge staples like fruits, vegetables and deli meats. Along with carrying bulk sizes of laundry detergent and paper towels, it also sells smaller items like a gallon of milk or single loaf of bread that lend themselves to a weekly grocery run.
    “You may be able to buy a piece of cheese that’s not two pounds,” Melich said.
    He said BJ’s is better off focusing on stealing sales from regional and national supermarkets like Publix and Kroger.
    “It would be a mistake for BJ’s to try to be Costco,” he said. “That’s not the point. The point is there are a lot of people in a lot of markets who would like to buy things cheaper than they would be at their local grocery store.”
    BJ’s Werner said the company’s typical customer has an average household income of between $75,000 and $100,000. He added that in the new markets BJ’s has entered, it’s been able to attract members who already belong to another club.
    Earlier this month, BJ’s said it expects modest growth during the full year. The retailer said it anticipates comparable club sales to increase 1% to 2% year over year, excluding gas sales. It said adjusted earnings per share will range from $3.75 to $4.00, with the lower end of that falling below the $3.96 that it reported for the most recent fiscal year.
    As of Tuesday’s close, BJ’s shares had climbed more than 12% this year. That has outperformed the S&P 500’s gains of more than 9%. More

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    Ford sees opportunity for Mustang as competitors abandon V8 engines

    Ford Motor sees opportunity to grow Mustang sales as it becomes the last American muscle car with the roar of a traditional V8 engine.
    The Chevrolet Camaro and Dodge Challenger — the Mustang’s closest American competitors — ended production in December.
    Ford has been able to continue to sell V8 models in part because it was early to adopt smaller, turbocharged four-cylinder engines for the Mustang.

    2024 Ford Mustang
    Source: Ford

    DETROIT — Ford Motor sees opportunity to grow Mustang sales as it becomes the last American muscle car with a traditional V8 engine, playing to generations of gearheads who’ve been drawn to the performance vehicles.
    The optimism comes after Mustang’s closest American competitors ended production of their muscle cars in December. General Motors stopped producing the Chevrolet Camaro, and Stellantis ended production of its Dodge Challenger V8 ahead of a new all-electric muscle car later this year, followed by gas-powered models with twin-turbo, inline-six engines that are expected in 2025.

    Their exodus (and that of others in the muscle car market) is the result of changing consumer demand away from two-door cars, as well as tightening fuel economy standards and the emergence of all-electric vehicles capable of unrivaled acceleration.
    Jeff Marentic, general manager of Ford Blue products, which includes the Mustang, said the pony car remains good business for the automaker both domestically and internationally. Mustang marks its 60th anniversary on April 17.
    “We’re excited to continue to offer Mustang. It’s sad to see competition leaving but that’s beneficial to us,” Marentic told CNBC. “For people who are looking for a true American sports car, it’s available to them. … We’re looking and talking about the future of Mustang, and how far we can grow it.”

    Ford Chair Bill Ford and President and CEO Jim Farley converse in front of newly revealed Mustang Dark Horse at The Stampede in downtown Detroit on Sept. 14, 2022.

    Marentic declined to discuss specific sales expectations for the vehicle but noted the company has added a new V8 model for the seventh-generation vehicle called the Dark Horse — a not so subtle reference to Ford’s ambitions for the V8-powered car.
    Both the 2024 Dark Horse and Mustang GT are powered by a 5.0-liter V8 engine, with the new model generating up to 500 horsepower and 418 foot-pounds of torque. Ford also has announced a 2025 Mustang GTD with a supercharged 5.2-liter V8 engine that’s expected to arrive as early as later this year with more than 800 horsepower.

    Ford has been able to continue to sell Mustang V8 models in part because it has invested in making the vehicles more efficient and it was early to adopt smaller, turbocharged four-cylinder engines that now make up about 48% of Mustang sales in the U.S.
    Ford also offers an all-electric Mustang Mach-E crossover that features similar design cues and badging to the two-door coupe, but it shares little to no other characteristics other than the name.
    “I can understand the green movement, but we’re so proud of our V8s,” Marentic said, adding the model accounts for a majority of Mustang sales in Europe. “It helps define who Ford is outside of the United States.”

    The Ford Mustang Mach-E is presented at the New York International Auto Show, Manhattan, New York, April 5, 2023.
    David Dee Delgado | Reuters

    The seventh-generation Mustang, which Ford revealed in September, recently started shipping outside of North America. It will eventually be sold in 85 markets on every continent aside from Antarctica, according to Ford.
    Non-U.S. sales have assisted in keeping the Mustang, which is exclusively produced at a plant in metropolitan Detroit, in production amid declining domestic demand for two-door sports cars.
    U.S. sales of the Mustang have declined from a recent peak of more than 122,000 units in 2015 to fewer than 49,000 last year.

    Internationally, Ford reports there have been more than 235,000 Mustangs registered since 2015. That’s when the automaker began producing right-hand drive models for countries such as the United Kingdom, Australia and Japan.
    The top markets for Mustang outside of the U.S. are Canada, Australia and Europe, according to Ford.
    “People relate extremely strongly to Mustang,” Marentic said. “The pull is amazing.”
    Marentic declined to discuss future product plans for the Ford Mustang, including a hybrid that was reportedly canceled for the seventh-generation car or the potential for an all-electric version of the two-door vehicle.

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    The UK is regulating memes about crypto and other investments to curb scams from ‘finfluencers’

    The Financial Conduct Authority said in a statement Tuesday that any marketing for financial products — including those expressed in memes — should be fair, clear, and not misleading.
    The watchdog said financial influencers, or “finfluencers,” must have the approval of an FCA-appointed representative to be able to make advertisements and memes about financial products.
    The regulator said the use of memes in promotions is particularly prevalent in the cryptocurrency industry, and that they’re often shared on platforms like Telegram and Reddit.

    Wenjin Chen | Digitalvision Vectors | Getty Images

    Britain’s financial services regulator announced guidelines for financial services companies and social media influencers making memes about cryptocurrencies and other investments in a bid to tackle a rise in scams.
    The Financial Conduct Authority said in a statement Tuesday that any marketing for financial products — including those expressed in memes — should be fair, clear, and not misleading.

    The watchdog said that financial social media influencers, or “finfluencers,” must have the approval of an FCA-appointed representative before publishing advertisements and memes about financial products and services, the FCA said.
    “Promotions aren’t just about the likes, they’re about the law. We will take action against those touting financial products illegally,” Lucy Castledine, director of consumer investments at the FCA, said in a statement Tuesday.
    “Social media will not always be the best place to promote complex products. Firms need to consider whether a platform that offers limited characters or space is the right place to do so.”
    The FCA said that, in 2022, it took down over 10,000 misleading adverts about financial services.

    Promotional crypto memes

    The regulator said the use of memes in promotions is particularly prevalent in the cryptocurrency industry.

    Crypto memes are especially prevalent on Telegram, a popular platform with digital currency enthusiasts. Reddit is another place where crypto is widely discussed.
    The FCA said it has seen promotions using memes to hype up certain investments on chatrooms such as Reddit and Telegram.
    Users of chatrooms and forums should be aware that financial promotions on those channels will still be subject to its rules, the FCA said.
    The move is part of the FCA’s bid to clamp down on the rise in financial scams. Scams rose sharply during the Covid-19 pandemic as more consumers turned to online platforms for their banking and investment needs.
    The FCA has become especially aggressive on crypto advertising. In October 2023, the FCA started to require that firms wishing to promote consumer crypto investing in the U.K. be authorized or registered with the regulator, or have their marketing approved by an authorized firm. More

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    FDA approves Merck’s drug for rare, deadly lung condition

    The FDA approved a drug from Merck designed to treat a rare, progressive and life-threatening lung condition called pulmonary arterial hypertension.
    The decision is a big step for the roughly 40,000 people in the U.S. living with that disease because Winrevair is the first drug to target the root cause of the condition. 
    The approval is also a win for Merck, which is working to diversify its revenue stream as its blockbuster cancer drug Keytruda approaches a loss of market exclusivity in 2028. 

    Exterior view of the entrance to Merck headquarters on February 05, 2024 in Rahway, New Jersey. 
    Spencer Platt | Getty Images

    The Food and Drug Administration on Tuesday approved a drug from Merck designed to treat a progressive and life-threatening lung condition in a win for both the drugmaker and for patients suffering from the rare disease.
    The agency greenlighted the therapy, which will be marketed as Winrevair, for adults with pulmonary arterial hypertension. The decision is a big step for the roughly 40,000 people in the U.S. living with that disease because Winrevair is the first drug to target the root cause of the condition. Other available medicines only help manage symptoms. 

    The condition refers to when the small blood vessels in the lungs narrow. That leads to high blood pressure in the arteries that carry blood from the heart to the lungs, which can damage the heart and result in limited physical activity. Starting from diagnosis, the mortality rate of patients is 43% by five years, according to Merck.
    Merck estimates that Winrevair will be available in select specialty pharmacies in the U.S. by the end of April, according to a company release. The drug is an injection administered every three weeks and is distributed in single-vial or double-vial kits.
    It will priced at $14,000 per vial before insurance, a Merck spokesperson said in a statement. But the company has a program that offers eligible patients help with out-of-pocket costs and copays.
    Winrevair is meant to be used along with existing therapies for the condition to increase exercise capacity, lessen the severity of PAH and reduce the risk of the disease worsening.
    The approval is critical for Merck, which is working to diversify its revenue stream as its top-selling cancer immunotherapy Keytruda approaches a loss of market exclusivity in 2028. 

    In a note this month, JPMorgan analyst Chris Schott estimated that Winrevair would reach worldwide annual sales of around $5 billion by 2030 and emerge as one of Merck’s “largest growth drivers.” 
    Merck Chief Medical Officer Eliav Barr told CNBC that “this is a really great opportunity for the company, but really, more importantly, a great important opportunity for patients.” He noted that the drug will be a “paradigm shift” for patients living with PAH.
    The company gained the rights to Winrevair through its $11.5 billion acquisition of Acceleron Pharma in 2021. At the time, Merck estimated that PAH would be a roughly $7.5 billion market by 2026. 
    The FDA’s approval is based on data from a late-stage trial, which followed more than 300 patients at a moderate stage of PAH who were already taking another medication for the blood vessel condition. 
    The study found that Winrevair combined with an existing therapy helped patients with the condition walk about 40.8 meters more in six minutes than those who received a placebo, 24 weeks into the trial. 
    “There is tremendous improvement in people’s ability to exercise and move around,” Barr said. “Because this disease causes people to be very, very homebound. They have shortness of breath, they can’t move.” 
    Winrevair on top of an existing medication also significantly improved eight of nine secondary goals in the study. That includes reducing the risk of death or worsening of the condition by 84% compared to an existing drug alone.
    Severe and serious adverse events were less common in the group of patients who took Winrevair compared to those who received a placebo, according to the trial. Side effects that occurred more frequently included nose bleeds, headaches and rashes, among others.
    One notable advantage of Winrevair is that patients or caregivers can inject it under the skin with appropriate training from a healthcare provider. Meanwhile, some existing treatments for PAH must be administered by medical professionals at an infusion center. 
    “One of the things we heard very loud and very clear, from both patients and physicians, is that they wanted something that you could get at home,” Barr said. 
    Merck is continuing to study Winrevair in other phase two and phase three trials.
    Those trials include late-stage studies on patients with more advanced PAH disease, and those who are within the first year after diagnosis. Merck has said it expects those trials to finish around 2025 and 2026. 

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    Canada Goose to cut 17% of its corporate workforce, following string of retail layoffs

    Canada Goose will cut about 17% of its corporate workforce, which included about 915 employees as of April 2023.
    The cuts follow other retailers that kicked off the new year with sweeping layoffs, including Macy’s, Nike and Wayfair.
    Between April 2021 and April 2023, Canada Goose nearly doubled its corporate workforce to support its growth, according to a securities filing.

    Canada Goose parkas hang on display at a store in Richmond Hill, Ontario.
    Chris So | Toronto Star | Getty Images

    Canada Goose said Tuesday that it will cut about 17% of its corporate workforce, following a string of other retailers that have laid off employees this year as consumers continue to pull back on discretionary spending. 
    It is not clear how many employees will be laid off. The cuts will affect staff at Canada Goose’s corporate headquarters, which had about 915 employees as of April 2023, according to a securities filing. Between April 2021 and April 2023, Canada Goose nearly doubled the number of employees at its corporate head offices from 544 to 915 to support its “continued growth,” the filing says.

    In a statement Tuesday, CEO Dani Reiss said, “Today, we are realigning our teams to ensure that corporate resources are fit for purpose to fuel our next phase of growth across geographies, categories, and channels.”
    “We are focused on achieving efficiency and margin expansion, while investing in key initiatives — brand, design and best-in-class operations — that will powerfully position our iconic performance luxury brand to deliver long-term growth,” Reiss said.
    The cuts, part of the company’s ongoing “Transformation Program,” come after what it called a “comprehensive review” of its organizational structure and the roles it needs to reach its goals. It expects the cuts will bring “immediate” cost savings and simplify its workforce, allowing it to make decisions more quickly and become more efficient. 
    Shares of Canada Goose closed about 7% lower.
    In the three months that ended Dec. 31, Canada Goose saw sales grow 6% compared to the year-ago period, but the results fell short of analysts’ expectations, according to LSEG, formerly known as Refinitiv. When releasing its holiday-quarter results, Canada Goose noted that its wholesale revenues were particularly weak, an ongoing dynamic for the company that many other retailers have felt.

    Several retailers, including Under Armour and Nike, have said recently that wholesale orders have been sluggish as department stores look to keep inventories in check and contend with a slowdown in demand. 
    The layoffs at Canada Goose come after Nike, Macy’s, Wayfair, Hasbro and Etsy all announced widespread layoffs over the past few months. In many cases, the companies were looking to focus on what they can control by becoming more efficient and focusing on profits, even as shoppers pull back on discretionary items such as clothes, shoes and toys.

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    Europe’s economy is under attack from all sides

    A decade ago Xi Jinping was welcomed to Duisburg in Germany’s Ruhr valley. He praised the region as a hub for Chinese investment; greeted a train that had spent a fortnight travelling from Chongqing, via Russia, to Europe’s industrial belt; and enjoyed an orchestral performance of traditional mining songs. More recently, another Chinese arrival in Germany received a frostier reception. In February a ship called BYD Explorer No. 1 unloaded 3,000 or so electric cars made by BYD, a Chinese electric-vehicle (EV) firm. As the ship’s name suggests, it is likely to be the first of many. Little surprise it has prompted worries about the future of Germany’s hallowed carmakers.China is churning out cars, as its leaders funnel cash and loans to high-tech industry in an attempt to revive the country’s moribund economy. Its manufacturing trade surplus has risen to a record high, and is set to rise higher still. As a consequence European leaders are fearful of an influx of advanced, cheap Chinese goods. On March 5th the European Commission decided it had sufficient evidence to declare that China had unfairly subsidised its EV makers, paving the way for the introduction of tariffs. Ursula von der Leyen, the commission’s president, has warned China not to “race to the bottom” on green tech. Britain has begun a probe into the country’s excavators. Emmanuel Macron, France’s president, will host Mr Xi in May. He will, according to diplomats, deliver “firm messages” on trade.Chart: The EconomistCountries from Brazil to India are moving to block China’s exports. They represent a particular threat to Europe, however, because of the continent’s growth model, which has long had trade at its heart. According to the IMF, Europe is the region of the world that is most open to trade and investment (see chart 1). In the EU trade in goods and services runs to 44% of GDP, almost twice as much as in America. As a rules-based bloc, the EU is reluctant to violate trade rules too blatantly by erecting protectionist barriers. So is Britain, which has a history of support for free trade.The new China shock arrives at a terrible time. European industry is still dealing with an energy shock caused by Vladimir Putin’s invasion of Ukraine, which began just as national leaders were attempting to accelerate the green transition. Gas prices—usually around €20 ($22) per megawatt hour—spiked to more than €300 in 2022, sending electricity prices soaring (see chart 2). A post-covid rebound turned into inflation and an energy crisis. The European Central Bank (ECB) was forced to raise rates to 4%, hitting demand in an already weakened economy.Chart: The EconomistFiscal largesse during the pandemic and energy crisis has since given way to retrenchment. Germany’s tight deficit limits have forced the country to cut back this year, with more cuts to come in 2025. France has just announced that its deficit in 2023 was 5.5% of gdp, well above forecasts. It had already pulled what Bruno Le Maire, its finance minister, calls an “emergency brake”, cutting €10bn of spending in order to bring fiscal policy back on track.Chart: The EconomistThe EU’s gdp has grown by just 4% in real terms since 2019, which is half the pace America has enjoyed. In Britain and Germany GDP per person has actually fallen (see chart 3). Official forecasts for the eu and Britain project dismal growth of less than 1% this year; beyond that, things are uncertain. Whereas American productivity seems to have received another boost during the pandemic, Europe’s is limping along. The ECB, national leaders, think-tanks and two former Italian prime ministers, Enrico Letta and Mario Draghi, are trying to work out why exactly Europe has lost “competitiveness”. At the same time, another threat looms: if Donald Trump wins America’s presidential election in November, European exporters could be subject to tariffs on sales to one of their most lucrative markets.Shock horrorSo as the continent’s economy reels from the Russia shock of 2022, how will it adapt to a new one from China and maybe a third from America? The first China shock came in 2001, when the country entered the WTO and benefited from lower trade barriers as a result, posing a challenge to Western manufacturers. In America, some regions and sectors were hit hard. Europe got off more lightly, in part because the shock coincided with the accession of central and eastern European countries to the EU. The fast development of the EU’s newest members supported the bloc’s productivity growth and created demand for Western goods.This time will be different. Although China is moving towards high-tech manufacturing in response to its economic struggles, Mr Xi is also keen to wean the country from reliance on Western industry. He wants to build technological leadership in sectors he sees as necessary for national strength, such as industrial robots and railway equipment. A weaker China aiming to be less dependent on foreign inputs will buy fewer cars, less machinery and less high-tech equipment, precisely the goods that lifted European exports during the first China shock. China’s economy is also much larger than it was at the turn of the millennium. As Adam Wolfe of Absolute Strategy, a consultancy, notes, the rise in China’s exports since 2019—moderate as a share of the country’s GDP—has already felt like a deluge elsewhere.Moreover, European firms now face Chinese competition in increasingly sophisticated markets, both at home and in third countries. Take cars, the crown jewel of European industry. The sector, along with its supply chain, employs around 3m people across the continent. Yet Chinese brands already make up 9% of the pure-battery market in western Europe, according to data from Matthias Schmidt, an automotive consultant. Across the continent, new registrations of Chinese-brand consumer vehicles more than doubled between 2022 and 2023. French, German and Italian mass-market brands appear to be especially vulnerable to competition. Analysts at UBS, a bank, reckon that “legacy” carmakers’ global market share will drop from 81% today to 58% by 2030.Europe’s leaders are particularly keen to develop green industries as they pour billions into the climate transition. Yet European companies producing for the mass market will struggle to compete with the value offered by their Chinese competitors. China already dominates wind turbines, for instance, with a market share of 60% in 2022, according to the Global Wind Energy Council, an industry body. That provides its manufacturers with the scale needed for further innovation. And things are only heading in one direction. China’s producer-price index, which measures prices at the factory gate, has been falling for 17 months, and is roughly at its level of 2019. The same index for the EU, even excluding energy costs, is almost a quarter above its level of four years ago.Europe’s own attempts to “de-risk” from China—that is, to source fewer critical inputs from the country and restrict investments and exports of high-tech goods to it—will also push up costs. In a recent paper Julian Hinz of Bielefeld University and co-authors look at the effects of a hard decoupling from China and its allies. For Germany, the European economy most closely intertwined with China, they find that a gradual adjustment would cost 1.2% of GDP, around the same as for Japan. Other major European countries and America would lose about 0.5% of GDP. China’s loss would come to around 2%.Europe’s de-risking costs would become harder to bear if Mr Trump wins in November. New levies are a grim prospect for the continent’s exporters, which last year sold €500bn of goods to America. Indeed, 20 of the EU’s 27 member states ran a goods-trade surplus with the country.Mr Trump stoked tensions during his first term, when America imposed hefty tariffs on aluminium and steel, hitting European producers. Europe replied with its own tariffs on American products, including bourbon and motorbikes. It took the arrival of Joe Biden for the two sides to reach a (somewhat shaky) truce. Trump 2.0 could be much more painful. The former president has proposed a 10% tariff on all America’s imports. Robert Lighthizer, who advises him on trade, has gone further, arguing recently that even more brutal tariffs might be “necessary”.Lighthizer’s heavy blowThe German Economic Institute, a think-tank, has calculated the possible impact. Imagine America applies 10% tariffs on its imports and punishes China with even higher tariffs. America’s own economy would take a hit, via higher consumer prices—but Europe’s would be hurt more. Germany’s total exports would be nearly 5% lower by 2028 than in a world with no new American tariffs. Private investment would also be hit. As a result German GDP would be 1.2% lower, equivalent to a cumulative loss of €120bn-worth of output by 2028. A Trump administration might go even further, seeking retaliation against Europe for its digital-services taxes, which target American tech firms, or for refusing to toe the president’s line on China.Meanwhile, when it comes to tensions between China and the EU, tit-for-tat probes into subsidies and dumping look likely to become common. The Chinese government, for example, has a clear idea who is behind the EU’s EV probe: it has started an anti-dumping probe into French cognac. France has designed its own ev subsidies for consumers to exclude Chinese brands; Chinese firms offer customers a rebate of the same magnitude, in what one analyst calls “a single-finger greeting to Mr Macron”.The combination of energy, China and Trump shocks could lead to an extended period of restructuring in the European economy. For the continent’s consumers, this would be a mixed blessing. Trade wars make goods pricier and reduce choice, but when China subsidises solar panels, European utilities and households get cheaper energy. Some regions could benefit, too. Countries such as Spain, with solar-power potential, or Sweden, with water and wind power, could attract new industries. Indeed, earlier this year H2 Green Steel, a Swedish firm, announced that it had secured €6.5bn in funding for its plant near Lulea in the country’s north.Similarly, some foreign firms will want to invest in Europe to be close to customers when trade is difficult. Poland attracted almost €30bn in foreign direct investment (fdi) in 2021 and 2022, and probably as much in 2023. That is twice the amount it typically received before the pandemic. FDI now makes up 25% of Poland’s capital spending, compared with an average of 5% or so in industrialised countries.Some of its inflows came from Bosch, a German engineering firm, and Daikin, a Japanese conglomerate, both of which are building heat-pump factories in the country. According to a survey by E&Y, a consultancy, 67% of “international decision-makers” expect their firm’s European presence to grow, up from 40% in 2021. That may include defence companies, which will supply the continent’s growing armed forces—and China’s EV makers.But most of the restructuring will be less pleasant. Continental, one of Germany’s largest suppliers of car parts, is shedding thousands of jobs. Bosch is getting rid of 1,200 positions in its automotive-software division. Others in the car industry have also announced cuts. The previous China shock spurred technological advances as workers moved to more productive companies that invested in innovation. But over the past 15 or so years, firms exposed to Chinese competition have shown signs of slower productivity growth, according to research by Klaus Friesenbichler of the Austrian Institute of Economic Research and co-authors.Although Germany is Europe’s manufacturing powerhouse, the triple challenge could affect the whole continent. Regions with energy-intensive industries or that produce mass-market products in western Europe stand to lose. Even areas insulated from the initial effects may see successful local firms invest more overseas, as they adapt to protectionism elsewhere. Over the next five years some 75% of large businesses in the euro area expect to diversify across countries, move production closer to sales or shift parts of their businesses to more politically aligned countries, according to a survey by the ECB.Old problemsThere are limits to what cash-strapped governments can do to ease the transition to new industries. This is especially true when they have promised to spend more on defence and there is little desire for the sort of grand EU reforms that could stimulate growth. The bloc recently approved €1.2bn in public subsidies for cloud computing by seven countries over several years. As McKinsey Global Institute, another think-tank, points out, that comes to about 4% of the annual investment of Amazon Web Services. Patents in frontier technologies are registered mostly by American and Chinese firms. Despite its huge population, in many respects the EU lacks scale. Internal goods trade is far from seamless. Services markets are as fragmented as ever.That leaves a second approach—seeking to preserve the old—for which lobbying is fierce. In an age when the populist right is resurgent, few politicians want to be blamed for job losses. Payoffs from doing the difficult, technical work of deepening capital markets or integrating electricity markets do not come quickly. In Brussels and Paris the clamour for unhelpful subsidies and other forms of protectionism is growing. Germany, meanwhile, is hamstrung by a three-party coalition that cannot agree on anything, let alone a thorny issue that cuts across geopolitics and industrial policy. As politicians prevaricate, more BYD ships will make the journey to Europe’s ports. ■ More

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    Hyundai’s Genesis reveals all-electric SUV concept, the Neolun

    Hyundai’s Genesis is previewing the future of the growingly prominent luxury brand with a new large all-electric concept vehicle called the Neolun.
    The full-size SUV features a sleek exterior design illuminated by long horizontal headlights and taillights reminiscent of the brand’s current EVs, though more modern.
    The vehicle’s front seats can swivel to face the rear passengers for lounge seating.

    Genesis Neolun Concept

    NEW YORK – Hyundai’s Genesis is previewing the future of the growingly prominent luxury brand with a new large all-electric concept vehicle called the Neolun.
    The full-size SUV features a sleek exterior design illuminated by long horizontal headlights and taillights reminiscent of the brand’s current EVs, though more modern.

    The interior of the Neolun – derived from the Greek “neo,” or new, and the Latin “luna,” which means moon – is minimalistic compared with many recent concepts that include door-to-door screens. The SUV features a large central screen with physical buttons below it and a control panel and knob to the right of the driver.
    The vehicle’s front seats can swivel to face the rear passengers for lounge seating.
    “The Neolun Concept is a concept model that showcases the future vision of Genesis, as well as the overall direction in which the brand is headed in terms of product, design and technological advancement,” Genesis said in an emailed statement.
    Automakers routinely use concept vehicles to gauge customer interest or show the future direction of a vehicle or brand. The vehicles are not meant to be sold to consumers.

    Genesis Neolun Concept

    The company declined to disclose whether the vehicle is a preview of an upcoming large all-electric SUV for Genesis, which has been growing its lineup in the U.S.

    Genesis’ U.S. sales increased 23% last year to a record of 69,175 units compared with 2022. Genesis, which became its own brand in 2015, outsold more established luxury rival Infiniti and expects sales to continue to grow this year.
    “Our standalone retail footprint is rapidly expanding, and the brand continues to achieve record-breaking sales results in the United States,” Tedros Mengiste, vice president of sales operations for Genesis Motor America, said in a release last week.

    Genesis Neolun Concept

    Genesis also revealed another concept called the GV60 Magma Concept, a high-performance variant of its compact EV crossover.
    The brand said it aims to develop a high-performance Magma model for each production vehicle in the existing lineup.
    The concept vehicles were revealed Monday night ahead of their public debuts this week at the New York International Auto Show.

    GV60 Magma Concept 

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