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Frugal is the new cool for young Chinese as economy falters

BEIJING, Sept 19 (Reuters) – Before the pandemic, Doris Fu imagined a different future for herself and her family: new car, bigger apartment, fine dining on weekends and holidays on tropical islands.

Instead, the 39-year old Shanghai marketing consultant is one of many Chinese in their 20s and 30s cutting spending and saving cash where they can, rattled by China’s coronavirus lockdowns, high youth unemployment and a faltering property market.

“I no longer have manicures, I don’t get my hair done anymore. I have gone to China-made for all my cosmetics,” Fu told Reuters.

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This new frugality, amplified by social media influencers touting low-cost lifestyles and sharing money-saving tips, is a threat to the world’s second-largest economy, which narrowly avoided contraction in the second quarter. Consumer spending accounts for more than half of China’s GDP.

“We’ve been mapping consumer behaviour here for 16 years and in all of that time this is the most concerned that I’ve seen young consumers,” said Benjamin Cavender, managing director of China Market Research Group (CMR).

China’s ‘zero-COVID’ policy – including stringent lockdowns, travel restrictions and mass testing – has taken a heavy toll on the country’s economy. The government’s crackdown on big technology companies has also had an outsized effect on the young workforce.

Unemployment among people aged 16 to 24 stands at almost 19%, after hitting a record 20% in July, according to government data. Some young people have been forced to take pay cuts, for example in the retail and e-commerce sectors, according to two industry surveys. The average salary in 38 major Chinese cities fell 1% in the first three months of this year, data collated by online recruitment firm Zhilian Zhaopin show.

As a result, some young people prefer to save than splurge.

“I used to go see two movies every month, but I haven’t stepped inside a cinema since the pandemic,” said Fu, an avid movie fan.

Retail sales in China rose just 2.7% year-on-year in July, recovering to 5.4% in August but still well below the mostly 7%-plus levels during 2019, before the pandemic.

Almost 60% of people are now inclined to save more, rather than consume or invest more, according to the most recent quarterly survey by the People’s Bank of China (PBOC), China’s central bank. That figure was 45% three years ago.

Chinese households overall added 10.8 trillion yuan ($1.54 trillion) in new bank savings in the first eight months of the year, up from 6.4 trillion yuan in the same period last year.

That is a problem for China’s economic policymakers, who have long relied on increased consumption to bolster growth.

China is the only leading economy that cut interest rates this year, in an effort to spur growth. China’s big state-owned banks cut personal deposit rates on Sept. 15, a move designed to discourage saving and boost consumption. read more

Addressing the rise in people’s inclination to save, a PBOC official said in July that when the pandemic eases, the willingness to invest and consume will “stabilize and rise.”

The PBOC did not respond to Reuters requests for comment; neither did China’s Ministry of Commerce.

’10 YUAN DINNER’

After years of increasingly ardent consumerism fuelled by rising wages, easy credit and online shopping, a move toward frugality brings young people in China closer to their more cautious parents, whose memories of lean years before the economy took off have made them more inclined to save.

“Amid the tough job market and strong downward economic pressure, young people’s feelings of insecurity and uncertainty are something they never experienced,” said Zhiwu Chen, chair professor of finance at Hong Kong University Business School.

Unlike their parents, some are making a show of their thriftiness online.

A woman in her 20s in the eastern city of Hangzhou, who uses the handle Lajiang, has gained hundreds of thousands of followers posting more than 100 videos on how to make 10 yuan ($1.45) dinners on lifestyle app Xiaohongshu and streaming site Bilibili.

In one minute-long video with nearly 400,000 views, she stir-fries a dish made from a 4-yuan basa fillet, 5 yuan of frozen shrimp, and 2 yuan of vegetables, using a pink chopping board and pink rice cooker.

Social media discussions have sprung up to share money-saving tips, such as the ‘Live off 1,600 yuan a month challenge,’ in Shanghai, one of China’s most expensive cities.

Yang Jun, who said she was deep in credit card debt before the pandemic, started a group called the Low Consumption Research Institute on networking site Douban in 2019. The group has attracted more than 150,000 members. Yang said she is cutting spending and is selling some of her belongings on second-hand sites to raise cash.

“COVID-19 makes people pessimistic,” the 28-year-old said. “You can’t just be like before, spend all the money you make, and make it back again next month.” She said she is now out of debt.

Yang said she has cut out her daily Starbucks coffee. Fu said she switched her makeup powder brand from Givenchy to a Chinese brand called Florasis, which is about 60% cheaper.

French luxury brands leader LVMH (LVMH.PA), which owns Givenchy, and coffee giant Starbucks Corp (SBUX.O) both said sales fell sharply in China in the latest quarter. read more

China has given no signal on when or how it will exit from its zero-COVID policy. And while policymakers have taken various measures in hopes of boosting consumption, from subsidies for car buyers to shopping vouchers, far more money and attention has been directed towards infrastructure as a way of stimulating the economy.

Stability has been the key theme for China’s policymakers this year, experts say, as President Xi Jinping gears up for a third leadership term at next month’s congress of the ruling Communist Party.

“In the past, when you had economic slowdown, consumers were more likely to feel that government policy is going to fix this problem very quickly,” said Cavender at CMR. “I think right now the challenge is when you interview younger consumers they really don’t know what the future holds.”

Fu, the marketing professional, said she has deferred plans to sell her two small apartments to buy a bigger one in a better school district for her son, and has given up for now on upgrading from her Volkswagen Golf.

“Why do I dare not upgrade my house and my car, even if I have the money?” she said. “Everything is unknown.”

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Reporting by Albee Zhang and Tony Munroe
Editing by Bill Rigby

Our Standards: The Thomson Reuters Trust Principles.

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American tourists splurge in Paris boutiques as euro slides

PARIS, July 15 (Reuters) – American tourist Shawna Wilson says she has splashed out on four dresses at the high-end LVMH-owned department store La Samaritaine in Paris, tempted by the prices as the euro reached parity with the U.S. dollar.

The euro tumbled below $1 on Wednesday for the first time in two decades on fears that rising energy prices triggered by the Ukraine conflict could tip the European Union into a prolonged economic crisis. read more

“It’s like it’s on sale here,” said Wilson, 49, from Colorado, whose purchases included two dresses for her daughter. “Because the euro and the dollar are about the same, it definitely encourages us to spend.”

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The weak euro is big draw for tourists, particularly Americans – who are flagged as a key growth driver for the European luxury goods sector in the second quarter, according to analysts from Barclays.

The strong dollar versus the euro contributed to a four-fold rise in tourism spending in Europe in June compared with last year, with an acceleration in spending from Americans, analysts at UBS, citing data from VAT refund provider Planet, said.

The luxury sector has rebounded quickly from the pandemic as people rushed to spend money saved during lockdowns — buying themselves treats as socialising resumed.

But sales in China, the world’s largest luxury goods market, have plunged this year as a new wave of strict COVID-19 lockdowns shuttered shops, crimped demand and also meant fewer high-spending Chinese tourists in Europe. read more

So as Americans fill up transatlantic flights, their eagerness to cash in on the weak euro is helping to replace business lost as a result of the lack of Chinese visitors, who were the main source of luxury sales growth in Europe pre-pandemic.

Luxury goods companies Richemont (CFR.S) and Burberry on Friday reported higher sales in Europe, which helped to offset a drop of more than 30% in China. read more

France has benefited most from the tourists’ splurge.

Sales to tourists in France in June climbed to just 11.3% below 2019 levels, a positive sign for French luxury labels that have a big exposure to their home market, UBS analysts said.

American tourists were thronging Paris’s Avenue Montaigne this week, browsing in the luxury boutiques, which include designer names such as Louis Vuitton, Chanel and Gucci.

Cheryl Penn, 70, a realtor from Delray Beach, Florida, had already bought herself a skirt and stocked up on baby clothes for her granddaughter.

“We just got on the Avenue, so we just started our shopping spree,” said Penn.

“I like that the euro and the dollar are equal so I know exactly what I’m spending,” she said.

Jennifer Groner, a TikTok influencer, went on a shopping spree in Paris in April when the euro was under pressure versus the dollar.

“I’ve never seen anything like this in terms of the price savings,” she told Reuters, estimating that she snapped up a Birkin bag from Hermes in Paris for $4,000 less than it would have cost her in the United States, paying little over $9,000, thanks also to a VAT refund.

“You’re able to travel to Europe, take in the culture but at the same time buy a bag,” said Groner, who also bought handbags and accessories from Prada, Dior, Louis Vuitton and Chanel, for overall savings of $8,000 compared with U.S. prices, based on her calculations.

Monika Arora, founder of pursebop.com, a news and information website for luxury brands, said she believes the brands will eventually “harmonise” prices.

“They’ve done that many times before,” she said.

Chanel told Reuters in May it could implement further price increases in July to account for currency fluctuations – particularly the weakness of the euro – and inflation. read more

The pull of Paris remains strong for American shoppers even though New York’s high end shopping streets teem with luxury European designer brands.

“So many of my friends more than ever are taking little weekend trips to Paris and other places and they are shopping while they are there — because that’s what you do while you’re in Paris,” said Jennifer Tumpowski, outside Gucci’s flagship store on New York’s Fifth Avenue.

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Reporting by Lea Guedj, Doyinsola Oladipo, Gigi Zamora and Mimosa Spencer. Editing by Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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EXCLUSIVE Nike to make full exit from Russia

PARIS/COPENHAGEN/LONDON, June 23 (Reuters) – Nike (NKE.N) is making a full exit from Russia three months after suspending its operations there, the U.S. sportswear maker told Reuters on Thursday, as the pace of Western companies leaving the country accelerates.

Nike said on March 3 it would temporarily suspend operations at all its Nike-owned and -operated stores in Russia in response to Moscow’s actions in Ukraine, adding that those still open were operated by independent partners.

On Thursday, it joined other major Western brands, like McDonald’s and Renault, in confirming it will leave the country completely.

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“Nike has made the decision to leave the Russian marketplace. Our priority is to ensure we are fully supporting our employees while we responsibly scale down our operations over the coming months,” Nike said in an emailed statement.

Foreign companies seeking to exit Russia over the war in Ukraine face the prospect of new laws being passed in the coming weeks allowing Moscow to seize assets and impose criminal penalties. That has encouraged some businesses to accelerate their departure.

“What was a trickle is becoming a torrent (of Western companies exiting Russia)”, said Paul Musgrave, a political science professor at the University of Massachusetts.

Other sportswear makers have also been pulling back.

People walk past a closed store of the sporting goods retailer Nike at a shopping mall in Saint Petersburg, Russia May 25, 2022. REUTERS/Anton Vaganov

Rival Adidas (ADSGn.DE) said in March it was shutting its Russian stores and pausing online sales. Puma (PUMG.DE) also suspended its operations in March. Reebok suspended sales in March and is in talks to sell more than 100 stores to Turkish shoe retailer FLO Magazacilik. read more

Adidas currently has no plans to resume business in Russia, the German sportswear company told Reuters on Thursday.

“The operation of Adidas’ stores and Adidas’ online retail in Russia continues to be suspended until further notice, this also applies to the delivery of goods to Russia,” it said in an emailed statement.

Musgrave said companies that leave Russia may struggle to return.

“This presents opportunities for domestic firms in some markets but even more for brands from China and elsewhere to make inroads,” he said.

For Nike, which gets less than 1% of its revenue from Ukraine and Russia combined, the move is largely symbolic rather than material to its results.

The company has a history of taking a stand on social and political issues. It supported American football quarterback Colin Kaepernick in his decision to kneel during the U.S. national anthem as a protest against racism and dropped Brazilian soccer star Neymar last year because he refused to cooperate in an investigation into sexual assault allegations.

Russian media reported in May that Nike had not renewed agreements with its largest franchisee in Russia, Inventive Retail Group (IRG), which operates 37 Nike-branded stores in Russia through its subsidiary Up And Run.

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Reporting by Mimosa Spencer, Jacob Gronholt-Pedersen and Richa Naidu. Additional reporting by Praveen Paramasivam; editing by Matt Scuffham, Jason Neely, Bernadette Baum and Jane Merriman

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Wall Street ends mixed after punishing week

  • Ross Stores plunges after cutting 2022 forecast
  • S&P 500 +0.01%, Nasdaq -0.30%, Dow +0.03%

May 20 (Reuters) – Wall Street ended mixed on Friday after a volatile session that saw Tesla slump and other growth stocks also lose ground.

The S&P 500 and the Nasdaq logged their seventh straight week of losses, their longest losing streak since the end of the dotcom bubble in 2001.

The Dow (.DJI) suffered its eighth consecutive weekly decline, its longest since 1932 during the Great Depression.

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Worries about surging inflation and rising interest rates have pummeled the U.S. stock market this year, with danger signals from Walmart Inc (WMT.N) and other retailers this week adding to fears about the economy.

The S&P 500 spent most of the session in negative territory and at one point was down just over 20% from its Jan. 3 record high close before ending down 18% from that level and flat for the day.

Closing down 20% from that record level would confirm the S&P 500 has been in a bear market since reaching that January high, according to a common definition.

The tech-heavy Nasdaq (.IXIC) was last down about 27% from its record close in November 2021.

S&P 500 bear markets

Weighing heavily on the S&P 500, Tesla (TSLA.O) tumbled 6.4% after Chief Executive Elon Musk denounced as “utterly untrue” claims in a news report that he sexually harassed a flight attendant on a private jet in 2016. read more

Other megacap stocks also fell, with Apple Google-owner Alphabet Inc (GOOGL.O) down 1.3% and Nvidia (NVDA.O) losing 2.5%.

Shares of Deere & Co (DE.N) dropped 14% after the heavy equipment maker posted downbeat quarterly revenue. read more

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 19, 2022. REUTERS/Andrew Kelly

Pfizer (PFE.N) rose 3.6%, helping the S&P 500 avoid a loss for the day.

Recent disappointing forecasts from big retailers Walmart, Kohl’s Corp (KSS.N) and Target Inc (TGT.N) have rattled market sentiment, adding to evidence that rising prices have started to hurt the purchasing power of U.S. consumers.

On Friday, Ross Stores (ROST.O) plunged 22.5% after the discount apparel retailer cut its 2022 forecasts for sales and profit, while Vans brand owner VF Corp (VFC.N) gained 6.1% on strong 2023 revenue outlook.

Traders are pricing in 50-basis point rate hikes by the U.S. central bank in June and July.

The S&P 500 edged up 0.01% to end the session at 3,901.36 points.

The Nasdaq declined 0.30% to 11,354.62 points, while the Dow Jones Industrial Average rose 0.03% to 31,261.90 points.

S&P 500’s busiest trades

For the week, the S&P 500 fell 3.0%, the Dow lost 2.9% and the Nasdaq declined 3.8%.

About two thirds of S&P 500 stocks are down 20% or more from their 52-week highs.

Volume on U.S. exchanges was 13.0 billion shares, compared with a 13.5 billion average over the last 20 trading days.

Declining issues outnumbered advancing ones on the NYSE by a 1.16-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week highs and 48 new lows; the Nasdaq Composite recorded 11 new highs and 353 new lows.

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Reporting by Amruta Khandekar and Devik Jain in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta, Arun Koyyur and Grant McCool

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Siemens to leave Russia due to Ukraine war, take hefty charge

  • Siemens to leave Russia after 170 years
  • Russia makes up around 1% of total revenues
  • Shares fall after earnings miss
  • CEO condemns the war in Ukraine

ZURICH, May 12 (Reuters) – Siemens (SIEGn.DE) will quit the Russian market due to the war in Ukraine, it said on Thursday, taking a 600 million euro ($630 million) hit to its business during the second quarter, with more costs to come.

The German industrial and technology group became the latest multinational to announce losses linked to its decision to leave Russia following the Feb. 24 invasion, which Moscow calls a “special military operation”.

Several companies, from brewers Anheuser-Busch InBev (ABI.BR) and Carlsberg to sportswear maker Adidas (ADSGn.DE), carmaker Renault and several banks have been counting the cost of suspending operations in or withdrawing from Russia. read more

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Siemens Chief Executive Roland Busch described the conflict as a “turning point in history.”

“We, as a company, have clearly and strongly condemned this war,” Busch told reporters.

“We’re all moved by the war as human beings. And financial figures must take a back seat in the face of the tragedy. Nevertheless, like many other companies, we’re feeling the impact on our business.”

During the second quarter Siemens incurred 600 million euros in impairment and other charges mostly recorded in its train-making mobility business subsequent to sanctions on Russia, Siemens said.

Busch said further impacts were to be expected, mainly from non-cash charges related to the winding-down of legal entities, revaluation of financial assets and restructuring costs.

“From today’s perspective, we foresee further potential risks for net income in the low- to mid-triple-digit million range, although we can’t define an exact timeframe,” he added.

Siemens shares dropped 5% in early trading as the company missed analysts’ expectations for second- quarter profit.

The Munich company employs 3,000 people in Russia, where it has been active for 170 years. It first went to Russia in 1851 to deliver devices for the telegraph line between Moscow and St Petersburg.

The country now contributes about 1% of Siemens’ annual revenue, with most of the present day business concerned with maintenance and service work on high-speed trains.

Its sites in Moscow and St Petersburg are now being ramped down, Busch said.

The costs weighed on Siemens’ second quarter earnings, with net income halved to 1.21 billion euros ($1.27 billion), missing analysts’ forecasts of 1.73 billion.

The company posted industrial profit of 1.78 billion euros, down 13% from a year earlier and also missing forecasts.

But demand stayed robust, with orders 22% higher on a comparable basis and revenue 7% higher.

As a result it confirmed its full-year outlook, with revenue comparable revenue growth of 6% to 8% for the full year, with a downturn in mobility expected to be compensated by faster growth in factory automation and digital buildings.

JP Morgan analyst Andreas Willi described the results as “mixed with strong orders, industry leading growth in automation and strong cash conversion.”

($1=0.9508 euros)

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Reporting by John Revill; Editing by Kim Coghill and Clarence Fernandez

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Morning Bid: Sell everything (except the dollar)!

A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., May 5, 2022. REUTERS/Andrew Kelly/Files

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A look at the day ahead in markets from Dhara Ranasinghe.

When the blue-chip Dow Jones index slides more than 1,000 points on one day, U.S. Treasury yields jump as much as 20 basis points and Britain’s pound drops more than 2%, you’d be forgiven for thinking that investors have gone into a sell everything mode.

But with the safe-haven dollar at 20-year highs, there was at least one asset benefiting from Thursday’s market mayhem.

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For sure, waters seem calmer as European trading gets underway, although Asia shares slumped overnight.

Having breathed a sigh of relief that the Federal Reserve didn’t opt for a massive 75 bps rate hike at this week’s meeting, in a change of mind investors fretted that aggressive rate hikes – like the 50 bps move the Fed delivered – could trigger a sharp economic slowdown or recession.

Adding to the volatility was a surge in U.S. real or inflation-adjusted bond yields, which rose to their highest since early 2020 .

The Bank of England warning of recession risk and inflation rising above 10% only exacerbated concerns about the growth outlook, sparking the biggest one-day drop since March 2020 (and we all remember why that month stands out, right?)

Given that it’s non-farm payrolls day in the United States, Friday’s trading session may not bring a quiet end to the week.

Economists polled by Reuters predict the U.S. economy created a solid 391,000 new jobs in April, versus 431,000 a month earlier.

The unemployment rate is expected to fall to 3.5%, which would make a pre-pandemic low.

The jobs data, alongside next week’s U.S. inflation data , should help frame the debate over the Fed policy outlook.

Key developments that should provide more direction to markets on Friday:

– Tokyo consumer prices rise at fastest pace in 7 years read more

– ECB must quickly raise key rates, says head of Germany’s Ifo institute –

– Swedish Central Bank minutes

– Federal Reserve Bank of New York President John Williams

– U.S. non-farm payrolls

– Brazil April CPI

– European earnings: Adidas, IAG, Amadeus, Intesa San Paulo, Beazley

– U.S. earnings: CIGNA, Goodyear

US non-farm payrolls
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Reporting by Dhara Ranasinghe, editing by Karin Strohecker

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White House, truckers blast Tex. as inspections snarl Mexico traffic

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The White House, U.S. Customs and Border Protection and trucking groups said Wednesday that a new policy by Texas Gov. Greg Abbott (R) was creating a multi-mile backup of commercial vehicles carrying perishable fruits, vegetables and other products.

The policy forces trucks to submit to a state inspection after a federal inspection once they cross the border from Mexico.

The delays have raised concerns that a U.S. economy already experiencing inflation and supply shortages could face an entirely new set of problems, potentially driving up prices on certain products and making other items even more scare.

Freight operators are panicking about the ramifications of the delays, as much of the United States’ produce this time of year is imported from Mexico. Abbott said last week that the “enhanced safety inspections” of all commercial vehicles were necessary because federal officials were not stopping drugs and criminals from entering the United States. Now, trucking officials say, little is entering the country at all.

“This isn’t a regional issue, or that the city of Laredo is not getting their produce at grocery stores,” said John Esparza, president of the Texas Trucking Association. “We are seeing delays that will be felt across the country. There are a half a dozen divisions of trucking [affected]. There’s the refrigerated segment of trucking, there’s household goods, forestry, fuel tankers, commodities for trade goods — this is about General Motors, Ford and everything coming out of Mexico, our trade partner.”

Texas will bus migrants to the nation’s capital, Abbott says

Strawberries, asparagus, avocados, tomatoes and other spring favorites are sitting in lines of refrigerated trucks many miles long as growers and shippers scramble to reroute and grocers hustle to find products from elsewhere to avoid empty shelves in the run-up to the Easter and Passover holidays.

White House press secretary Jen Psaki said Wednesday that Abbott’s “unnecessary and redundant” inspections of trucks at ports of entry between Texas and Mexico have disrupted food and automobile supply chains, delayed manufacturing, affected jobs and further raised prices for American families. She said that trucks are facing delays exceeding five hours at some border crossings and that commercial traffic has dropped by as much as 60 percent.

“The continuous flow of legitimate trade and travel and Customs and Border Protection’s ability to do its job should not be obstructed,” Psaki said. “Governor Abbott’s actions are impacting people’s jobs and the livelihoods of hard-working American families.”

CBP issued its own statement, saying that delays have become extreme. It said the commercial wait time at the Pharr port of entry had grown from 63 minutes to 320 minutes, with a 35 percent drop in traffic. The Laredo-Colombia Solidarity International Bridge, which typically averages a 26-minute wait, had “reached a peak wait of 300 minutes and has seen over a 60% drop in commercial traffic.”

Abbott is expected to hold a news conference on the matter later on Wednesday. He moved last week to impose the new restrictions, alleging that the Biden administration had “open-border policies” that “paved the way for dangerous cartels and deadly drugs to pour into the United States.”

He said Texas “will immediately begin taking unprecedented action to do what no state has done in American history to secure our border,” which means each truck will be inspected by the Texas Department of Public Safety for human trafficking, weapons, drugs and other contraband.

The governor’s plan to have state officials scrutinize each truck means that up to 80 percent of perishable fruits and vegetables have been unable to cross since Friday, said Lance Jungmeyer, president of the Fresh Produce Association of the Americas.

This is causing losses of millions of dollars a day for employers and employees, who have been idled, he said, with customers unable to load product from their Texas suppliers. It also means transportation shortages are increasing as available trucks are stuck waiting in line to cross the border, all of which will continue to drive up the price of produce at American grocery stores.

Biden accuses Abbott of ‘government overreach’ for investigating parents of children transitioning genders

“These trucks are already inspected by Customs and Border Protection — scanned and X-rayed and drug-dog sniffed,” Jungmeyer said. “These new inspections are redundant. At numerous ports of entry — Laredo, Pharr, Eagle Pass and others — Mexican drivers are starting to protest.”

Abbott’s office did not respond to requests for comment on Tuesday.

The line for trucks to cross at the Pharr bridge has been reported at up to seven or eight miles long, said Rod Sbragia, vice chair of the Fresh Produce Association of the Americas and director of sales and marketing for Tricar Sales, a grower and shipper of Mexican produce. He said between 2,000 and 3,000 trucks stand nose to tail waiting for entry. Refrigerated trucks, he said, have about six or seven days of fuel to run their refrigeration units. After that, spoilage is certain.

Sbragia said that nothing has crossed the border into Texas for three days and that trucks are packed so tight there’s no way of getting out of line so they can reroute. He says many workers in Texas are not being paid right now because there is no product to work with and no trucks to load and unload.

“We have about $200,000 to $300,000 of produce waiting in line right now,” he said. “And we’re just one shipper. There are hundreds like me. Millions of dollars’ worth of product sitting on trucks that may end up being spoiled.”

The situation is fluid, said Laura Garza, a logistics specialist for K & K International Logistics, customs brokers in charge of traffic operations for Texas. But for now, she said, Mexican truckers have, in protest, blocked traffic going northbound or southbound on the Pharr bridge, the No. 1 bridge for imports of produce in the United States, leading to and from Reynosa, Mexico, which usually sees around 2,000 truck crossings per day. Nor is traffic moving in the northbound direction of the Free Trade Bridge at Los Indios, an international border crossing located eight miles south of Harlingen and San Benito.

The ban on avocados from Mexico could be bruising, the longer it goes on

“The transport companies are saying, ‘If this lasts 30 days, we can last 30 days in protest, as well.’ You’re going to lose contracts and crops. Why affect trade this way? It doesn’t make any sense. Border communities depend on trade,” she said.

Beto O’Rourke, who is running against Abbott for governor of Texas, said in a video tweet Monday showing a long line of trucks in Laredo, “What you see behind me is inflation,” describing what he called the “true cost to Texans and all Americans” of “Greg Abbott’s political stunt along the border.”

Matt Mandel is the vice president of finance for his family’s company, which grows and ships Mexican fruits and vegetables. He heard about the new inspections on Friday. Heading out of town, he hoped it would blow over by the end of the weekend.

“But the issues have gotten worse, and the consequences have compounded,” Mandel said. “And I don’t see an easy solution to alleviate the logjam we find ourselves in.”

His company sells 60 percent of its produce in Boston, New York, Philadelphia and elsewhere in the Northeast. The rest goes to Canada. He had three trucks that were supposed to go out Friday, he said, and it is unclear when they might reach their final destination.

“We won’t know if we have losses until this product makes it all the way through the supply chain. When I have my name on an eggplant and it ends up looking and tasting like crap, that’s what people remember,” he said. “Ultimately, there will be spoilage and higher costs for everyone involved. It’s literally just partisan politics.”



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Nestle, tobacco groups latest companies to pull back from Russia

March 9 (Reuters) – Nestle(NESN.S), Philip Morris (PM.N)and Imperial Brands (IMB.L)joined the list of multinationals stepping back from Russia on Wednesday as pressure mounts from consumers in the West to take a stand against the invasion of Ukraine.

The world’s biggest packaged food group fell into line with rivals Procter & Gamble (PG.N) and Unilever (ULVR.L) in halting investment in Russia, while cigarette maker Philip Morris said it would scale down manufacturing and Imperial went further and suspended it.

The moves came after Coca-Cola (KO.N) and McDonald’s (MCD.N) halted sales in Russia, where a senior member of the ruling party has warned that foreign firms which close down could see their operations nationalised. read more

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McDonald’s said the temporary closure of its 847 stores in the country would cost it $50 million a month. read more

Sportswear firm Adidas (ADSGn.DE)also quantified the cost of scaling back its operations, saying it would take a hit to sales of up to 250 million euros. read more

PepsiCo (PEP.O) and Starbucks (SBUX.O) have also joined the dozens of global companies closing stores, factories or exiting investments to comply with sanctions or due to supply disruptions. read more

Those supply hurdles include the world’s top three shipping giants suspending container routes.

Yum Brands Inc (YUM.N), parent of fried chicken giant KFC, said it was pausing investments in Russia, a market that helped it achieve record development last year. read more

‘LAWS OF WAR’

In response to the exodus, Andrei Turchak, secretary of the ruling United Russia party’s general council, warned that Moscow might nationalise idled foreign assets.

“United Russia proposes nationalising production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine,” Turchak wrote in a statement published on the party’s website on Monday evening. read more

The statement named Finnish privately owned food companies Fazer, Valio and Paulig as the latest to announce closures.

“We will take tough retaliatory measures, acting in accordance with the laws of war,” Turchak said.

SANCTIONS

Moscow, which calls its invasion of Ukraine a “special military operation”, has been hit by sweeping Western sanctions that have choked trade, led to the collapse of the rouble and further isolated the country.

Banks and billionaires have also been targeted, with the European Commission preparing new sanctions targeting additional Russian oligarchs and politicians and three Belarusian banks, Reuters reported. read more

While the war in Ukraine and the sanctions have bolstered prices for commodities which Russia exports such as oil, natural gas and titanium, those sanctions have largely barred Moscow from taking advantage of the high prices.

On Tuesday the United States banned Russian oil imports. read more

U.S. oilfield services company Schlumberger (SLB.N), which derives about 5% of its revenue from Russia, said the ongoing conflict would likely hurt its results this quarter. read more

Global commodities trader Trafigura Group raised a $1.2 billion revolving credit facility from banks to help address soaring energy and commodity prices. read more

Norway’s Yara (YAR.OL), a top fertiliser maker, said on Wednesday it would curtail ammonia and urea output in Italy and France due to surging gas prices.

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Reporting by Reuters bureaux; writing by Sayantani Ghosh and Paul Sandle; editing by Jason Neely and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

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Uniqlo owner stays put in Russia as Levi, AMEX and others sever ties

  • Uniqlo’s Russian stores to stay open
  • Danone suspends investments in country
  • KPMG, PwC, EY, Deloitte all cut ties with local units
  • American Express calls Ukraine attack ‘unjustified’

March 7 (Reuters) – Uniqlo owner Fast Retailing (9983.T) will keep its stores in Russia open, joining a small group of international firms that are staying put even as dozens of big brands temporarily shutter operations or exit the country over its invasion of Ukraine.

Political pressure is building on companies to halt business in Russia, while operations have also been complicated by sweeping sanctions affecting everything from global payments systems to a range of high-tech products.

Large shippers have suspended container routes to and from Russia and many Western companies from Nike Inc and home furnishings giant Ikea to energy majors BP and Shell (SHEL.L) have closed shop or announced plans to exit the country.

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“Clothing is a necessity of life. The people of Russia have the same right to live as we do,” said Fast Retailing CEO Tadashi Yanai in remarks first reported by Nikkei, adding that every country should oppose war.

A spokesperson told Reuters the company had seen no noticeable impact on its supply chain or logistics in Russia, where Uniqlo has 49 stores.

In contrast, Levi Strauss & Co (LEVI.N) suspended its Russian operations, including any new investments.

The Big Four accounting firms KPMG, PwC, EY and Deloitte moved one by one to cut their ties with Russia, as did credit card company American Express (AXP.N).

Dairy cooperative Arla Foods, French yoghurt maker Danone (DANO.PA) and Belgian chemicals group Solvay (SOLB.BR) also suspended operations or investment in the country, while the RIA Novosti news agency cited carmaker Nissan as saying it would halt production at its factory in St Petersburg. read more

Nissan said last week it was suspending vehicle exports to Russia, joining peers like General Motors Co (GM.N) and Sweden’s Volvo Cars (VOLCARb.ST).

The sun sets behind the skyscrapers of the Moscow International Business Centre, also known as “Moskva-City”, in Moscow, Russia April 23, 2018. REUTERS/Anton Vaganov

Among companies continuing to operate in Russia were McDonald’s Corp (MCD.N) and PepsiCo Inc (PEP.O), prompting New York state’s pension fund – a shareholder in the pair – to urge them and others to consider pausing their operations there. read more

Russia announced new “humanitarian corridors” on Monday to transport Ukrainians trapped under its bombardment – to Russia itself and its ally Belarus, a move immediately denounced by Kyiv as an immoral stunt. read more

Russia calls the campaign it launched on Feb. 24 a “special military operation”. It denies attacking civilian areas and says it has no plans to occupy Ukraine.

After Russian President Vladimir Putin signed a new media law on Friday, Chinese-owned video app TikTok said it would suspend live-streaming and the uploading of videos to its platform in Russia. read more

“We have no choice but to suspend livestreaming and new content to our video service while we review the safety implications of this law,” it said in a series of Twitter posts on Sunday.

‘UNJUSTIFIED ATTACK’

Many companies have strongly condemned Russia’s actions as they suspended services in the country.

“In light of Russia’s ongoing, unjustified attack on the people of Ukraine, American Express is suspending all operations in Russia,” AMEX said on its website. read more

Netflix , which had already temporarily stopped future projects and acquisitions in Russia, suspended its service “given the situation on the ground”, a spokesperson said. read more

KPMG, PwC, EY and Deloitte all said they would sever links with their Russian operations, affecting thousands of staff. read more

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Reporting by Akriti Sharma in Bengaluru, Chris Gallagher in Washington, DC, Rocky Swift in Tokyo; Writing by Anna Driver and Sayantani Ghosh; editing by Diane Craft, Kirsten Donovan, Bernadette Baum and Susan Fenton

Our Standards: The Thomson Reuters Trust Principles.

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The world’s leading luxury brands suspend business in Russia

  • French group Hermes has three stores in Moscow
  • Hermes ‘deeply concerned about situation in Europe’
  • Russians spend $9 bln/year on luxury goods -Jefferies

PARIS, March 4 (Reuters) – The world’s leading luxury brands said on Friday that they planned to temporarily close stores and pause business operations in Russia.

Birkin bag maker Hermes and Cartier owner Richemont were the first firms to announce such moves, followed by LVMH (LVMH.PA), Kering (PRTP.PA) and Chanel.

Doing business in Russia has become complex since Russia’s invasion of Ukraine, which prompted the United States, Britain and the Europe Union to impose sweeping sanctions.

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“Given our increasing concerns about the current situation, the growing uncertainty and the complexity to operate, Chanel decided to temporarily pause its business in Russia,” the French luxury fashion house said in a LinkedIn post.

Luxury giant LVMH, which owns such brands as Christian Dior, Givenchy, Kenzo, TAG Heuer and Bulgari among others, will close its 124 boutiques in Russia from Sunday but will continue to pay the salaries for its 3,500 employees in the country, a spokesperson told Reuters.

French multinational Kering, whose brands include brands as Gucci, Saint Laurent, Bottega Veneta and Boucheron among others, has two shops and 180 employees, which the company will continue to support.

While affluent Russians are keen consumers of luxury goods, analysts say the proportion of luxury sales generated from Russian nationals is small compared to the industry’s main growth engines, China and the United States.

Richemont, which also owns Dunhill, Jaeger-LeCoultre, Montblanc, Piaget, and Van Cleef & Arpels among other brands, has around a dozen directly operated stores, mostly in Moscow. It said in a statement it had suspended commercial activities in Russia on March 3 after stopping Ukraine operations on Feb. 24, the day Russia launched its invasion.

Hermes, which has three stores in Moscow, had planned to open an outlet in St. Petersburg later this year.

Investment bank Jefferies estimates that Russians account for around $9 billion in annual luxury sales, which is around 6% of Chinese spending and 14% of U.S spending on luxury goods.

Swiss watchmaker Swatch Group (UHR.S), which owns high end watches and jewellery labels including Harry Winston, said it would continue its operations in Russia, but was putting exports on hold “because of the overall difficult situation”.

L’Oreal (OREP.PA), LVMH (LVMH.PA) and Kering (PRTP.PA) have all pledged financial support to help Ukrainian refugees and Richemont said on Friday it was initiating a “significant donation” to Medecins Sans Frontieres.

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Reporting by Mimosa Spencer, Silvia Aloisi and Layli Foroudi; Editing by Tassilo Hummel, Jon Boyle, Susan Fenton, Alexander Smith and Sandra Maler

Our Standards: The Thomson Reuters Trust Principles.

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