SCMP : Baijiu blues: China’s Gen Z rewriting liquor industry as tastes change, c

Baijiu blues: China’s Gen Z rewriting liquor industry as tastes change, consumption dips
Young Chinese are driving a shift from the traditional white spirit to fruity, lower-alcohol beverages, in a sign of as evolving lifestyles

Selecting which crops to grow each season can be a make-or-break decision for farmers. And in the ancient Chinese town of Baisha, famous for its liquor production, more and more are sowing seeds of change in a bid to capitalise on the evolving tastes of consumers.

Located in the southwestern megacity of Chongqing and home to the distillery of Chinese baijiu distilled-liquor brand Jiang Xiao Bai, the town is seeing its farmland increasingly being used to grow green plums instead of sorghum grain.

Both are key ingredients in producing certain spirits, but unlike sorghum, which is primarily used in traditional fiery baijiu distillation, green plums are used to produce much lighter and fruitier wine.

“Innovative low-alcohol drinks mark a very clear market trend in China,” said Fan Li, PR director of Bottle Planet, which owns Jiang Xiao Bai. “We are embracing changes in the market.”

To ensure their legacy continues, more Chinese liquor brands are innovating their products, with an increased focus on low-alcohol, fruit-flavoured beverages instead of grain-based baijiu, as they seek to expand their consumer base from predominantly middle-aged men to other demographics such as young urban women.

Industry insiders say the younger generation could upend China’s alcohol market, where baijiu, with around 50 per cent alcohol content, has long been the mainstream tipple of choice. In a shift from traditional alcohol consumption, which revolves around social rituals, they say the younger generation is prioritising self-indulgent experiences – with drinking occasions maturing from networking obligations to emotional companionship.

According to a 2022 report from consulting firm Ries, China had 490 million potential young alcohol consumers, and beverages with around 10 per cent alcohol were the most favoured among them.

Thus, the term “new alcoholic beverages” has been trending in the country in recent years, referring to innovative low-alcohol drinks that combine beverage flavours with a mild tipsy experience, including pre-mixed cocktails, fruit wines, infused liquors, sparkling alcoholic drinks, and fruit beers.

Meanwhile, compared with more expensive traditional baijiu, lower prices – usually around 100 yuan (US$14) per bottle – are also appealing to young consumers, according to industry insiders.

China’s low-alcohol beverage market will exceed 74 billion yuan (US$10.3 billion) in 2025, with an annual compound growth rate of 25 per cent, said Wang Qi, executive chairman of the China Alcoholic Drinks Association, according to Chinese media National Business Daily.

Bottle Planet’s plum wine brand, Meijian, has played a leading role in this market since its launch in 2019, Fan said.

In major Chinese cities, the sales of Meijian increased last year by more than 30 per cent, on average, according to the company.

“The revenue of the entire company grew by 16 per cent last year, with the main growth driver being Meijian green plum liqueur,” Fan said.

In contrast, and aligning with an overall consumption decline across China that has led to weakened purchasing power and waning demand for business networking, the growth of traditional baijiu sales has been slowing in recent years.

Some prestigious and luxury baijiu brands – including Kweichow Maotai and Wuliangye – have also introduced their own fruit wines.

WSJ : Trump Warns Musk of ‘Serious Consequences’ if He Backs Democrats

Trump Warns Musk of ‘Serious Consequences’ if He Backs Democrats
Musk deletes social-media posts that sought to connect Trump to disgraced financier Jeffrey Epstein

Key Points
  • Trump threatened consequences if Musk backs Democrats in the midterms.
  • Musk deleted social-media posts linking Trump to Jeffrey Epstein; Trump denies any connection to Epstein’s crimes.
  • Trump aides play down the possibility of reconciliation after their public falling out over Musk’s criticism.

BEDMINSTER, N.J.—President Trump warned former right-hand-man Elon Musk to stay out of the midterm elections, threatening “very serious consequences” if he backed Democrats in the campaign.

Musk, who crossed Trump by staunchly opposing his “big, beautiful” tax-and-spending bill over deficit concerns, said last week that anyone who votes for this bill should be fired. Some Democrats have suggested that they try to win Musk over to their side, despite his being villainized by the party for his sweeping cuts to government staff. The billionaire spent about $300 million backing Trump and Republican candidates in the 2024 elections.

Asked by NBC News on Saturday if Trump was concerned that Musk could start funding Democratic candidates, Trump said “he’ll have to pay very serious consequences if he does that,” but declined to provide specifics.

In the NBC interview Trump said he had “no reason to” repair his relationship with Musk, after their breakup played out in real time on Thursday. Asked whether his relationship with the billionaire businessman was over, Trump said, “I would assume so.”

Musk deleted social-media posts in which he attempted to connect the president with convicted sex-offender Jeffrey Epstein. As the men’s relationship imploded on Thursday, Musk wrote on X that Trump’s name appeared in documents stemming from a federal investigation of Epstein, insinuating that he was in some way linked to the late disgraced financier’s criminal behavior.

On Friday, Musk wrote, “I will apologize profusely as soon as there is a full dump of the Epstein files.” Both posts have been removed from Musk’s X feed.

The president and his senior aides said Trump has no connection to Epstein’s crimes. Trump called the allegations “old news” in the NBC interview. “Donald Trump didn’t do anything wrong with Jeffrey Epstein,” Vice President JD Vance said in a recent podcast interview.

Behind the scenes, some people close to Trump and Musk have sought to organize a phone call between the two men in an attempt to hash out their differences, according to people familiar with the matter.

David Sacks, a venture capitalist who acts as Trump’s AI and crypto czar, has been privately encouraging Musk to call the president to try to mend the relationship, according to people familiar with the matter. James Fishback, a businessman and supporter of both Trump and Musk, encouraged Musk on social media to apologize to the president. A spokeswoman for Sacks declined to comment.

But Trump has said repeatedly in interviews he has no interest in talking to Musk, and the president’s advisers played down the possibility of a call.

A senior White House official reiterated that Trump has no immediate plans to speak with Musk, adding that the president is in the process of moving on after the high-profile clash with the billionaire. The official said Musk’s decision to delete his social-media posts about Epstein isn’t enough to repair the relationship.

After Fishback wrote in a social-media post that Musk should apologize to Trump, Fishback heard from White House officials, who thanked him for his support, but said—at least for now—that the relationship between the president and the Tesla CEO is over, a person with knowledge of the conversation said.

Long before Trump and Musk had their public falling out, some White House staff privately clashed with the billionaire, including Sergio Gor, the head of the White House Personnel Office.

Issues between Musk and Gor intensified during a mid-March cabinet meeting, where Musk complained extensively about what he said was the slow pace of hiring aides to fill agencies. Musk’s complaints were seen as an effort by Musk to embarrass Gor in front of the cabinet, according to several people familiar with the episode. But Gor was prepared to push back on Musk’s broadsides, and had statistics about the pace of hiring at his fingertips, some of the people said.

Steven Cheung, the White House communications director, said in a statement that Gor is a vital member of Trump’s team. “As a long-time advisor, there is nobody more capable of ensuring the government is staffed with people who are aligned with the mission to make America great again and work towards implementing the president’s agenda,” Cheung said.

Though Musk has toned down some of his harsh rhetoric over the past 48 hours, he has continued to raise concerns on his X account about what he argues is out-of-control spending by the federal government.

And he has continued publicly discussing the possibility of starting a new political party that he argues would better represent the majority of voters. He wrote on X that he plans to call it The America Party.

Trump and his senior advisers have tried to refocus their attention on passing Trump’s tax-and-spending bill, which cleared the House last month and is now being debated in the Senate.

“I’m too busy doing other things. You know, I won an election in a landslide. I gave him a lot of breaks, long before this happened,” Trump told NBC when asked if he has any desire to repair his relationship with Musk. “I think it’s a very bad thing, because he’s very disrespectful. You could not disrespect the office of the president.”

>>> Barrons Weekend Summary

Cover:
-As Warren Buffett prepares to retire as Berkshire Hathaway CEO, the spotlight is on companies that use or plan to use the Oracle of Omaha's strategy of combining insurance and investments, which is not as easy as it appears. The Buffett approach is increasingly being used by top alternative asset managers, such as Apollo Global Management and KKR, which incorporate Berkshire Hathaway into their investment strategies. Bill Ackman has been approved to transform Howard Hughes Holdings, a real estate company, into a "mini-Berkshire" with an insurance business. Dan Loeb plans to transform his European-listed investment fund, Third Point Investors, into an insurer focused on the hot annuity market. Other companies using a similar strategy include Markel Group, Fairfax Financial Holdings, Loews, and White Mountains Insurance Group. However, mimicking Buffett's strategy is challenging, as public markets would be awash in Berkshire Hathaways if it were easy. Markel and Fairfax are the closest to Berkshire in structure, generating impressive returns since the mid-1980s.

Interview:
-No update

Tech Trader:
-Nintendo has launched the Switch 2, its first console in eight years, and is now poised to be one of the most successful hardware releases of all time. The Switch 2 went on sale on Thursday, with customers waiting in long lines at GameStop, Best Buy, and other retailers. The hardware delivered what people wanted—a Switch with better technical capabilities that maintains the original's charm and overall form factor. The hot-selling Switch 2 means that Nintendo's consecutive console hex is probably over, as it offers backward compatibility, allowing it to play current-generation Switch games and giving gamers solace that their large investments in software are intact.

The Trader:
-The S&P 500, which reached 6000 points, has not been able to continue climbing, indicating a nuanced signal for investors. The index has gained 1.4% for the week, while the Dow Jones Industrial Average is rising 1% and the tech-heavy NASDAQ Composite is up 2.2%. The S&P 500 is key to the market, but it hasn't passed the test with flying colors. It reached 5999 by noon on Thursday, but sellers pulled it lower due to the risk of market drop. This is the third time since late February that the index came within less than 50 points of reaching 6000 and couldn't surpass it, indicating that there hasn't been enough economic change to boost confidence in stocks' potential soar. The index closed in the green on Friday, with the S&P 500 still below its record high of 6144 hit on February 19.
-Kroger shares have fallen about 9% since early 2025 due to investor appetite for risk. However, Kroger's upcoming earnings report should convince investors that there are plenty of gains to be had. Analysts have not reduced their earnings estimates during the dip, suggesting sentiment rather than fundamentals is responsible for the decline. Kroger stock trades at 13.6 times 12-month forward earnings per share, down from its 2025 peak of just over 15X. The risk reward is appealing at a reasonable 13x, and the stock has room to gain as long as its first-quarter earnings report doesn't disappoint. Analysts expect same-store sales to grow by 2.4%, driven mostly by mild price increases, bringing total revenue to $45.27B. Kroger doesn't have a tariff problem, as only a tenth of its products come from overseas, with just 1% coming from China. This could lift the gross profit margin slightly, though expected earnings of $1.45 per share would be up only 1.4% from the same quarter one year ago due to investments in employees and new technology assets.

Features:
-The Trump-Musk fissure has raised questions about whether Elon Musk poses more harm as Tesla CEO than good. Wall Street has overwhelmingly stated that replacing Musk is unimaginable and that investors should stick with the stock if they believe in his vision for an artificial-intelligence future. Future Fund co-founder Gary Black believes that Tesla without Musk would be a disaster for shareholders, as he is the visionary and architect behind autonomous vehicles and humanoid robots. Wedbush analyst Dan Ives sees Musk as the best asset of Tesla and sees him as CEO until 2030 despite the Trump situation. The question has been raised before, as reported by the Wall Street Journal in April. Tesla board chair Robyn Denholm responded to the Journal report, calling it "absolutely false." Tesla investor Alexandra Merz, a former credit officer at Moody's and founder of L&F Investor Services, defended Musk's leadership in a panel hosted on X, saying she doesn't want Musk replaced.
-The drug industry has been aligning with the Trump administration's efforts to move manufacturing and investment into the US and disentangle the American economy from the Chinese one. However, U.S. pharma companies have recently announced the biggest deals ever for the rights to experimental medicines invented by Chinese companies. These deals, worth around $25B in upfront and potential milestone payments, seem to fly in the face of White House policy. The deals could potentially result in new options for sick patients but also pose a major risk to U.S. biotech firms. The domestic drug pipeline relies on capital from Big Pharma, and now those funds may be going to start-ups in Shanghai, rather than Cambridge, Mass. The recent deals follow a successful trial result last year by US biotech Summit Therapeutics of a new immunotherapy cancer drug it licensed from Chinese firm Akeso. Since then, Big Pharma companies have rushed to get their own drugs to compete with Summit’s product. In November, Merck licensed an experimental drug from a Chinese drugmaker for around $500M up front and another $2.7B in potential milestone payments.

Europe:
-President Donald Trump has had a phone call with Chinese leader Xi Jinping, following the unraveling of a trade truce between the two countries in mid-May. The call, which lasted 90 minutes, was described as a "very good phone call" and resulted in a positive conclusion for both countries. Trump has also announced that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer will be meeting with their Chinese counterparts soon. Xi invited Trump for a visit and stated that Chinese students are welcome to study in the US. Both countries have accused each other of violating the agreement reached in Geneva, which reduced tariffs from triple-digit levels. The US has indicated that China is slow-walking the lifting of export restrictions on critical minerals, while China has pushed back against the reinforcement of restrictions on access to artificial-intelligence chip technology and electronic design automation software.

Emerging Markets:
-No update

Commodities:
-Wall Street is optimistic that deregulation and tax cuts will impact corporate earnings and favorable trade deals will be struck. Investment advisors are helping clients navigate this complex landscape, and they have not been making adjustments based on shifting government policy. The US dominates the digital economy, with Apple being the world's leading provider of smartphones, e-commerce, digital advertising, cloud computing, electric vehicles, and AI chips for GPUs. The rest of the world, except China, has fallen behind, with China's technology likely not being accepted in the US or Western Europe. The rest of the world is falling further behind in AI, with Europe and Japan lagging behind. A European Commission report revealed that Europe invests only 4% of what the US has invested in AI, and the rest of the world is becoming increasingly dependent on the US

Streetwise:
-Small-caps have been long-term winners in the stock market, with an average return of 15% a year over the past century. Swiss engineer Rolf Banz documented the "size effect" in 1981, which led to IBM's acquisition of Microsoft in 1986. IBM's PC-DOS, a quick and dirty operating system, was a success, but IBM didn't lock down the rights, allowing Microsoft to sell it as MS-DOS to PC clones. This led to the PCjr, which wasn't powerful enough to run Microsoft's Windows software. Goldman Sachs took Microsoft public in 1986, giving it a market cap of $777M, or $2.3B in today's dollars. Investors have enjoyed wild stock surges from personal computing, the internet, and artificial intelligence, with Microsoft valued at $3.5T. Tech giants dominate the stock market, and some argue for a small-cap comeback. Northern Trust analyst Daniel Fang points out that small-caps have underperformed large-caps for 12 years, leaving them cheap. Such cycles since 1930 have averaged nine years in either direction. With interest rates higher, more small-caps will naturally grow to become large-caps, boosting returns for small-cap indexes.

>>> Weekend Papers Summary

FINANCIAL TIMES
-Allies of Donald Trump and Elon Musk have urged the US president and his billionaire backer to repair their relationship to limit the political and commercial damage from the recent split over the president's signature tax bill. The fissure threatens to derail the White House's legislative agenda and wreck a hard-won alliance between Silicon Valley and Washington. Texas Senator Ted Cruz expressed disappointment and hope for a reconciliation. Tesla CEO Elon Musk responded positively to hedge fund manager Bill Ackman's urging to "make peace for the benefit of our great country." Trump claimed he was not even thinking about Elon and urged the Federal Reserve to cut interest rates.
-Cyber crime and espionage have become a significant security and economic threat due to the revolutionary capabilities of artificial intelligence. Cybersecurity companies, police, military, intelligence services, and think-tanks have issued warnings about the dangers of a lax approach to network security, but the message can fail to reach the public due to cost or complacency. Recent hacks against Marks and Spencer, the Co-op, and Harrods have generated attention and concern, but cyber security professionals have been frustrated that Synnovis, a blood testing and transfusions company, did not receive the same scrutiny. Marks and Spencer is expecting a £300M reduction in annual profits due to the cyber-attack, while Synnovis suffered a ransomware attack in June.
-Donald Trump has announced a new round of high-level trade talks between the US and China in London, following a phone call with Chinese President Xi Jinping. The talks will be attended by Treasury secretary Scott Bessent, commerce Howard Lutnick, and US trade representative Jamieson Greer. The meeting is expected to go well, as the Chinese embassy in Washington did not respond to a request for comment. The talks come two months after Trump's "liberation day" tariffs escalated levies between the world's largest economies, reaching as high as 145%.
-Palestinians, desperate for supplies after Israel's over two-month blockade, have been forced to seek food from GHF. The Israeli army has used tanks, quadcopter drones, and snipers to attack Palestinians waiting for the distribution site. Telecoms worker Ehab Jomaa and five friends took cover in the ruins of a bombed-out beach hotel before being shot by a quadcopter. Witnesses reported that the run down the final stretch to the distribution site began around 5am, and many Palestinians found all the food gone. Many Palestinians have tried to reach the site several days in a row, despite the killings, as they are hungry after Israel's siege.
-FT's network of correspondents has analyzed the biggest global movers since the inauguration to identify which are struggling and which are triumphing under Donald Trump's policies. European defense companies and Chinese technology giants are among the winners, while Silicon Valley has some winners and many losers.
-The OECD annual meeting in Paris brought together world trade ministers for the first time since Trump imposed his "liberation day" tariffs. The collective challenge was clear, as governments seemed busier than ever cobbling together deals with Washington. The US message was clear: "We have a big trade deficit we need to deal with; what matters is unilateral power, which we have." This is the way the world is going to look, so you better get used to it. When a clutch of ministers later met to discuss reforming the World Trade Organization, the 30-year-old global body that has become increasingly marginalized, the conversation was no easier.
-St Louis Fed president Alberto Musalem has predicted that Donald Trump's trade war could lead to a sustained inflation burst at "50-50". He warned US rate-setters would face uncertainty through the summer, with Trump's levies potentially boosting inflation for a quarter or two. However, the impact of tariffs on prices could last longer. The Trump administration has already raised US tariffs on trading partners to the highest level in almost 90 years, threatening to fuel higher inflation and slow economic growth. Policymakers have adopted a wait-and-see approach after cutting interest rates by 1 percentage point in the second half of last year.
-Gemini, a cryptocurrency exchange run by the Winklevoss twins, has filed to list in the US to capitalize on the increasing demand for digital asset companies. The company filed confidential paperwork with the Securities and Exchange Commission for an initial public offering, following the double-digit increase in stablecoin operator Circle. The US election of President Donald Trump has rekindled investor enthusiasm for crypto assets, with Gemini being one of the beneficiaries. Cameron and Tyler Winklevoss, who founded Gemini in 2014, were vocal critics of the regulatory clampdown on digital asset companies and became active supporters of Trump. They are also among the largest personal holders of bitcoin, with about 70,000 coins. Bitcoin is currently trading at about $105,000, just shy of its record high.
-South Korean solar cell maker OCI Holdings is boosting production in the US despite President Trump's push to cut clean energy subsidies. The company plans to invest $1.2B to increase its Texas plant's annual cell-making capacity to 10GW by 2027, equivalent to 10 nuclear power plants. The increased energy demands from data centres in the US will fuel demand for solar power, and South Korean makers could fill the gap, especially as Chinese groups face tariffs. OCI's chair and co-chief executive, Woohyun Lee, believes that the US has big growth opportunities due to tight energy supply and the need for solar power to meet rising energy demand.
NEW YORK TIMES
-Kilmar Armando Abrego Garcia, who was mistakenly deported to El Salvador, has been flown back to the US to face charges of transporting undocumented migrants. The Trump administration's decision to bring him back could end the most high-profile court battle over President Trump's authority to seize and deport immigrants. The decision to pull Garcia out of El Salvador and put him on trial in an American courtroom could provide an offramp for the Trump administration, which had opposed court orders requiring the government to return him after his wrongful removal in March. The 10-page indictment filed in Federal District Court in Nashville may also be an effort to save face, as it may avoid a broader legal confrontation.
-Cybercrime and espionage have become a significant security and economic threat due to the revolutionary capabilities of artificial intelligence. Cybersecurity companies, police, military, intelligence services, and think-tanks have issued warnings about the dangers of a lax approach to network security, but the message can fail to reach the public due to cost or complacency. Recent hacks against Marks and Spencer, the Co-op, and Harrods have generated attention and concern, but cyber security professionals have been frustrated that Synnovis, a blood testing and transfusions company, did not receive the same scrutiny. Marks and Spencer is expecting a £300mn reduction in annual profits due to the cyber attack, while Synnovis suffered a ransomware attack in June.
-The Supreme Court has granted Elon Musk's Department of Government Efficiency access to sensitive records of millions of Americans held by the Social Security Administration. The Trump administration sought the data to combat waste and fraud and modernize operations. Two labor unions and an advocacy group sued to block access, arguing that the information was deeply personal and protected by privacy laws. The court allowed DOGE access to the necessary records, allowing the agency to continue its work.
-The Trump White House has raised concerns about potential security threats from Chinese Communist Party visitors to the US. However, the administration has allowed a Chinese government group member to access the president and the White House through a plan to sell memecoins. President Trump launched memecoins just before his inauguration, and his business partners created a contest in April offering top buyers a tour of the White House and a private dinner with Trump at his Virginia golf club. One buyer, He Tianying, is a member of the Chinese People's Political Consultative Conference.
-Vice President JD Vance's practice of blocking Biden administration nominees for U.S. attorney during his tenure in the Senate has been cited by a senior Democrat as a precedent for insisting on the same standard for President Trump's federal prosecutor nominees, potentially jeopardizing their confirmation. Senator Richard J. Durbin of Illinois plans to adhere to the Vance precedent for Trump prosecutors unless Republicans offer some concessions. U.S. attorney nominees typically pass through the Senate expeditiously once they clear an FBI background check and scrutiny by the Judiciary Committee. Durbin noted that Democrats had followed this practice in agreeing to confirm scores of prosecutors in Trump's first term.
-President Trump has suggested that he might eliminate Elon Musk's federal contracts to save money in the budget. However, this is not as easy as Trump suggests, as the Pentagon and NASA are heavily reliant on SpaceX for orbiting and moving government data. Trump could use his ability to instruct federal regulators to intensify oversight of Musk's business operations to punish him. This would reverse a slowdown in regulatory actions that benefited Musk's businesses after Trump was elected. Steven L. Schooner, a former White House contracts lawyer and professor at George Washington University, believes that selectively ramping up oversight would be difficult in an administration that has defined itself by reducing regulation and oversight.
-On June 6, 2025, federal agents in tactical gear threw flash-bang grenades during an immigration raid on a clothing wholesaler in Los Angeles's Fashion District. The operation was part of three immigration sweeps in Los Angeles, including one at a Home Depot where day laborers gather for work. The raid began at 9:15 a.m. and involved dozens of agents wearing helmets and green camouflage, some carrying riot shields and others with rifles and shotguns loaded with less-than-lethal ammunition.

NEW YORK POST
-Los Angeles Mayor Karen Bass has been criticized by several Trump administration officials for her opposition to federal efforts to arrest illegal immigrants. Bass stated that she will not stand for this, as police used flash bangs to disperse the violent mob of protesters who descended on the arrest sites. She also stated that her office is in close coordination with immigrant rights community organizations. White House deputy chief of staff Stephen Miller dismissed Bass' declaration, stating that she has no say in this at all and that federal law is supreme and will be enforced.
-The public breakup between Elon Musk and President Trump has sparked concerns about SpaceX's future. Trump relies on Musk's privately owned firm to fulfill the administration's plans for NASA's return to the moon, ongoing operations at the International Space Station, a classified deal with US intelligence to build hundreds of spy satellites, and expanding internet access to rural parts of America. SpaceX, known for building and launching rockets and the Starlink satellite internet network, has approximately $22B in government contracts on the books. Musk threatened to decommission a roughly $5B deal to build the Dragon spacecraft for NASA, which Trump later reversed course on. A Republican consultant connected with Trump said that Trump could cancel most deals and contracts if he wants, but the government may still have to pay them based on contract details. The split likely works in both of their favors, as Elon distanced himself from Trump in a public way to get his businesses back on track.

FT : China fast tracks rare earth export licences for European companies

China fast tracks rare earth export licences for European companies
Beijing has attempted to improve relations with Brussels since Donald Trump returned to the White House

Beijing has agreed to fast-track approvals for rare earth export licences for some European companies after China’s strict controls on shipments of the critical minerals rocked global supply chains.

European officials and industry groups have complained that a new licence system for rare earths and related magnets, introduced in the wake of Donald Trump’s “liberation day” tariffs in April, risked causing widespread factory stoppages.

However, according to a statement published by China’s commerce ministry on Saturday, Beijing is now “willing to establish a green channel for qualified applications to speed up approval”.

No details were given as to how fast the process would be, or which European companies would be included. One European executive in Beijing, who asked not to be named, warned that manufacturers might still face delays in receiving their rare earth and magnet shipments in the short to medium-term given the “huge backlog” of licence applications.

The announcement followed a meeting between Chinese commerce minister Wang Wentao and Maroš Šefčovič, EU commissioner for trade and economic security, in Paris last week.

Wang urged the EU to “take effective measures to facilitate, safeguard and promote compliant trade of high-tech products to China”.

Beijing has become increasingly concerned that Europe has followed US-led restrictions on sales of semiconductors and chipmaking equipment to China.

On Friday Trump said a new high-level round of trade talks between the US and China would take place on Monday in London, paving the way for further de-escalation in the trade war between the world’s two biggest economies.

Rare earths are just one of many disputes between Brussels in Beijing. The sides have also been in talks over China’s opposition to the bloc’s tariffs on Chinese electric vehicles, as well as Beijing’s tariffs on French cognac.

According to the commerce ministry, discussions on prices of Chinese electric vehicles sold in the bloc have entered “the final stage” but further efforts “from both sides were needed”. China plans to announce the result of its investigation into European brandy imports on July 5.

Beijing has sought to improve ties with Brussels since Trump returned to office but EU officials said that, despite warm words, there had been little compromise on issues of concern until now.

Šefčovič on Wednesday said he had pressed his Chinese counterpart over the rare earth delays, which were slowing deliveries for manufacturers of a wide range of items from cars to washing machines.

The Financial Times reported on Thursday that European businesses had lobbied officials in Beijing to set up a special channel to fast-track export licences for “reliable” companies.

On Friday the European Chamber, a Beijing lobby group, warned that despite Beijing approving urgently needed shipments, progress had “not been sufficient” to prevent severe supply chain disruptions for many companies.

Jens Eskelund, the chamber president, said member companies were “still struggling” with both the delays and the lack of transparency.

WSJ : New York to Paris in Under Four Hours? Inside the Effort to Build the Next

New York to Paris in Under Four Hours? Inside the Effort to Build the Next Concorde
Boom Supersonic CEO Blake Scholl wants to bring back flights that break the sound barrier. Now he just needs to figure out whether airlines and travelers will buy in.

When the Concorde was grounded in 2003, done in by strained economics and a fiery crash on a Paris runway, it appeared to be the end of the line for supersonic travel. Nothing emerged to replace it. In fact, the speed of air travel moved in the opposite direction, with many routes getting slower in recent years as congestion and air-traffic control inefficiencies jammed up the skies.

A former Amazon software engineer named Blake Scholl founded a company to change this. A decade ago, he launched Boom Supersonic, betting that his Denver-based startup could tap in to the allure of ultrafast travel—a desire that has never quite been extinguished despite the financial and practical challenges that ended the Concorde’s nearly 30-year run. Scholl sees a world where round-trip trans-Atlantic business journeys happen in a single day.

“The thinking has been, ‘Supersonic flight would obviously be great, but nobody is doing it so therefore it must be impossible,’ ” the 44-year-old chief executive said during a recent interview. “Not true.”

Earlier efforts, including the Concorde, failed because of ill-conceived business models or other organizational problems as big aerospace companies struggled to shift to making new kinds of products. The technology needed to achieve supersonic flight, he argued, has been available all along.

A self-taught aviation buff, Scholl regularly tangles with critics on social media, vacillating between snark and professorial counterarguments in his rebuttals. “I wish I’d thought about that before starting the company,” he shot back on X to a poster who noted that the Concorde was too expensive to operate.

Scholl’s dream is dividing the aviation industry into two camps: those who think Boom will fail, and those who believe he’s the outsider who can finally revive supersonic travel. Scholl aims to have the company’s first jet, called Overture, flying by 2029. Last year Boom completed construction on a factory in Greensboro, N.C., where it plans to build the jet. It’s begun manufacturing a prototype of the engine that will power Overture.

His fans include prominent startup investors, social-media throngs and Elon Musk and President Trump, who posed earlier this year with a model of the Overture jet. United, American and Japan Airlines have made preliminary orders for future planes. He’s backed by famed Silicon Valley accelerator Y Combinator, former United CEO Oscar Munoz, OpenAI founder Sam Altman. Former Boeing CEO Phil Condit sits on Boom’s board.

But Boom has recently scrambled to raise money. Its valuation, once close to $1 billion, was around $500 million at the end of last year, and the company has slashed its fundraising goals. Last fall it laid off roughly half its 260 employees. Boom has yet to begin building a full-size jet.

Delta CEO Ed Bastian is among Boom’s doubters, calling the jet “a very, very expensive asset” for the roughly 75 travelers it is expected to carry—a fraction of a typical wide-body jet. He said he remembers the Concorde as a cool experience, but one he partook in only through free upgrades, never with his own money. He has no plans to buy Overture jets. “I wish them well,” he said.

Scholl is unfazed. He blames the lack of supersonic travel on an aerospace industry dominated by a pair of entrenched players, Boeing and Airbus, unwilling to shake up long-held business models.

The company earlier this year flight-tested a smaller prototype and is working to ready a full-size production model for flight tests by 2027.

At the test flight in January, Scholl stood by the control tower of the Mojave Air and Space Port north of Los Angeles in a crowd of around 200 people, including employees, investors and customers, as the sleek white XB-1 demonstrator took off. Then the group watched a livestream of the flight on a giant outdoor monitor as the single-seat plane zipped over the Southern California desert.

The speed reading ticked up bit by bit before hitting Mach 1, or around 750 miles an hour, the speed required to break the sound barrier.

At the controls was Boom’s chief test pilot, Tristan Brandenburg, a graduate of the U.S. Naval Test Pilot School who also helped train participants in the Navy’s elite fighter-tactics program, known as Top Gun.

“I’m not sure my brain’s fully caught up with me yet,” Brandenburg said after the flight. “I think it might still be flying supersonic.”

As for the window-rattling sonic boom that occurs when a plane travels faster than the speed of sound—and served as a cheeky inspiration for the name of Scholl’s startup—the CEO said the company has figured that out.

Boom plans to quiet the sonic boom using a technique called Mach cutoff, though the approach has limitations and not all experts are convinced it’s possible to dampen the sound enough to keep it from being a nuisance. What’s more, the company’s business model doesn’t rely on flights over inhabited land, since it expects its planes to initially shuttle between New York and London or Paris.

President Trump signed an executive order on Friday directing the Federal Aviation Administration to repeal a five-decade-old ban on supersonic flight over land in the U.S.

Where a round-trip ticket on the Concorde cost upward of $10,000 in the 1990s, Boom says it will bring down the per-seat cost on Overture to that of a regular business cabin, which runs about $1,700 one way between New York City and London, though it will be up to airlines to set fares. He said Boom’s interiors will have business-class amenities and space, where Concorde was known more for being fast—and cool—than for being a comfortable ride.

The concept behind the Concorde was buzzy in the 1960s, when the plane was designed and built under a French-British treaty. But supersonic flight’s heavy fuel usage became a liability by the time the plane made its debut in the 1970s, after an oil shock jolted jet-fuel prices higher and environmental worries were on the rise.

Airlines backed out of orders. British Airways and Air France were the only takers, and were heavily subsidized by their governments. Only 14 of the needle-nosed planes were built for commercial use.

By the end, Concorde was expensive to operate and maintain. Its glitz faded in comparison to more luxe amenities in regular-speed first-class cabins. Declining demand after a fatal crash in 2000 and the travel slump after the 9/11 attacks led to the jet’s retirement.

The Concorde’s fall from grace long fascinated Scholl. A lifelong aviation enthusiast, he spent years poring over textbooks on the science and engineering behind flight and, in his 20s, earned his private pilot’s license.

“We’re not working with new technology here,” he said.

Boom can succeed financially, he says, by offering only business-class seats. Boeing’s effort to develop a supersonic plane failed in the early 1970s, he said, because the company was trying to create a jet that could fly passengers at all price points.

Other companies have tried to develop supersonic business jets and small passenger planes since the Concorde was retired in 2003. Boeing took another try by backing a startup called Aerion that closed in 2021 after running out of money. The ventures stalled due to high costs, technical challenges and lack of demand, as speed simply hasn’t been a top priority for airlines.

Other players are working on superfast flight, for both military and commercial applications. Lockheed Martin has paired with the National Aeronautics and Space Administration to develop a supersonic jet that flies without creating a deafening sonic boom. Atlanta-based startup Hermeus, which is working on a jet that would fly at hypersonic speed, five times the speed of sound, said this month that it successfully tested an unmanned prototype. Meanwhile, China’s state-owned Comac has said it aims to build a quiet supersonic jet.

Until Scholl started Boom in 2014, he jumped between startups for years after leaving Amazon in 2006, eventually landing a job as a midlevel executive at Groupon after selling his latest venture, an online-shopping software provider called Kima Labs, to the discount-coupon provider in 2012.

“There is nothing like working on internet coupons to make you yearn to build something you truly love,” he wrote on LinkedIn.

Scholl started floating his theory—that supersonic technology is well within reach but the business model just needed work—to investors, airline executives and Condit, the former Boeing chief who was at the jet maker when it killed its supersonic-plane program in the early 1970s after the U.S. government, daunted by high costs and technological hurdles, cut off funding for the project.

Scholl founded Boom from his basement when he was living in the San Francisco Bay Area. He moved to Denver a year later and soon set up Boom’s first hangar at tiny Centennial Airport. A crew of employees plucked from other aerospace startups and small aviation companies began to tinker.

Boom designed its plane using carbon-fiber composite materials not in wide use when the Concorde was developed. Engineers used digital simulations rather than a physical wind tunnel to create the plane’s aerodynamic design. Boom’s Overture has a needle-nosed design similar to the Concorde’s. It relies on external cameras to ensure the pilots’ view.

“I think of this as a company that’s not just building a cheaper supersonic plane,” Condit said. “But rather bringing a modern, Silicon Valley approach to disrupting aerospace in the way Tesla did in the automotive industry.”

Condit grew most concerned about Boom’s future in 2022, after Rolls-Royce, which was supposed to provide Overture’s engines, said it was backing out of the deal because supersonic flight was no longer a priority.

Scholl had a contingency ready by the time the breakup was official: Boom would piece together its own engine from the ground up, making some parts in-house and sourcing others from various suppliers.

With the design set and an engine plan in place, Boom is now working to lock down the parts and factory tooling.

Some airlines have put in orders, but their deposits are relatively small. Japan Airlines invested $10 million in the company in 2017. United and American made smaller down payments, according to people familiar with the deals. More funds from customers won’t flow until the planes are closer to being delivered, and the agreements were carefully crafted so airlines still have the option not to take them, the people said.

After initially saying Boom needed to raise $6 billion to $8 billion to get Overture into production, Scholl now aims to raise $1 billion to $2 billion, which he says is enough to get the project to the stage where customer payments begin funding operations. Boom has raised $600 million so far.

Munoz, the former United CEO and Boom investor, said he was impressed with how the company was able to streamline and stay focused when it ran into fundraising challenges last year, which he described as typical startup growing pains. He has helped make introductions to new potential backers.

“The funding thing was the scary thing that happened,” Munoz said. “The product itself, not scary.”

Scholl shrugs off the challenges.

“There’s this belief in the industry that to do these kinds of things requires billions of dollars, requires an army of people,” he said, referring to the recent layoffs. “And I sort of made the mistake of wanting to play into that.”

“He has kind of an iron will and he believes so much in the mission that he never doubts that he will find a way through,” said Jared Friedman, a partner at Y Combinator, the Silicon Valley accelerator that’s among Boom’s investors. “He started from basically no professional network in the space and a year or two later he’d come up with a thoughtful plan.”

WSJ : Musk’s xAI Is Trying to Borrow $5 Billion While His Relationship With Trum

Musk’s xAI Is Trying to Borrow $5 Billion While His Relationship With Trump Blows Up
Bankers worry the fight will affect an ongoing deal to raise money for xAI’s data centers

Key Points
  • Elon Musk’s fight with President Trump has bankers worried about xAI’s ongoing deal to raise $5 billion.
  • Morgan Stanley is hoping to sell the debt at around 100 cents on the dollar.
  • Morgan Stanley may need to offer discounts or higher interest rates due to the Musk-Trump spat affecting X’s debt value.

On Thursday afternoon, Morgan Stanley had gathered a group of executives from xAI, Elon Musk’s artificial-intelligence company, to pitch Wall Street on why they should lend billions of dollars to a cash-burning, high-growth startup.

During the call, the xAI executives spoke about the company’s data centers and Grok, its AI-powered chatbot. While they presented, investors were following Musk’s attacks on social media against President Trump. That afternoon, Musk accused the president of covering up his ties to disgraced financier Jeffrey Epstein and for being ungrateful for his help in winning the election. Investors followed the fight on their screens as the xAI executives talked about their hopes for the company’s future.

Now, bankers worry the blown-up relationship between Musk and Trump will affect xAI’s $5 billion debt deal.

For nearly 2½ years, Wall Street didn’t know what to make of Musk’s control of X, the social-media site previously called Twitter. Musk’s takeover of the company spurred an exodus of advertisers, tanking its main source of revenue. Its uncertain future made it impossible for banks to sell the loans they had made to finance Musk’s buyout. Then Musk’s alliance with Trump during the presidential campaign last year changed everything.

After Trump was elected, investors were hungry for any type of trade that would benefit from the new administration’s policies. As Musk slashed expenses and began to lure back advertisers, X’s outlook began to brighten, helped further by a stake that it held in xAI that had surged in value.

That created an opening for the lenders. Morgan Stanley was able to sell some $11 billion of X debt between January and April without incurring major losses. X’s recently announced merger with xAI was another selling point, given the latter’s enormous growth potential.

Investors are now weighing how the social-media and AI company could be affected if the White House points its cannons at Musk’s sprawling business empire. Tesla’s stock is down around 7% since midday Thursday, and Trump has threatened to eliminate government subsidies and contracts for Musk’s businesses.

The spat is the latest headache for Morgan Stanley, which has been caught off guard by Musk’s battles before. The bank is in the middle of selling around $5 billion in debt for xAI, which would be used to help build out data centers that the company needs to train Grok, its large language model that draws on real-time platforms like X to answer users’ questions.

Morgan Stanley is hoping to sell the debt at around 100 cents on the dollar. But after the Musk-Trump fight, X’s outstanding debt traded down several points Thursday at around 95 cents on the dollar. As of Friday, the loans had moved closer to 97 cents, a trader said.

Because of the slide in prices, investors say they expect Morgan Stanley may need to offer a discount on the xAI bonds, a hike in the interest rate or other sweeteners to close the deal.

Morgan Stanley had originally hoped to sell some of the loans and bonds with a 12% interest rate, a sign the debt carries a high level of risk. The deal isn’t scheduled to close until later in the month.

xAI is also arranging the sale of $300 million in stock, in a transaction that values the company at $113 billion, people familiar with the matter said.

On Thursday’s call, Morgan Stanley shared financials with investors that showed xAI is rapidly burning through cash. The company reported a loss of $341 million before interest, taxes, depreciation and amortization for the first quarter, but predicted that it will break even in a matter of years.

Bankers are worried market turmoil could also trouble the debt sale. So far, buyers who showed initial interest haven’t backed off, people familiar with the matter said. Indeed, demand for both the debt and the equity sales has actually increased since Thursday, one adviser to the company said.

xAI is also arranging the sale of $300 million in stock, in a transaction that values the company at $113 billion, people familiar with the matter said.

On Thursday’s call, Morgan Stanley shared financials with investors that showed xAI is rapidly burning through cash. The company reported a loss of $341 million before interest, taxes, depreciation and amortization for the first quarter, but predicted that it will break even in a matter of years.

Bankers are worried market turmoil could also trouble the debt sale. So far, buyers who showed initial interest haven’t backed off, people familiar with the matter said. Indeed, demand for both the debt and the equity sales has actually increased since Thursday, one adviser to the company said.