Capacity development

Trump eases auto tariffs amid industry concerns

President Donald Trump has signed executive orders easing his controversial 25% tariffs on automobiles and parts, aiming to relieve pressure on carmakers struggling with rising costs.

The move follows warnings from manufacturers and analysts that the tariffs could inflate prices, harm domestic production and slow the industry’s recovery. Trump framed the measure as a temporary bridge, allowing automakers time to shift more manufacturing into the US instead of facing harsh penalties.

The changes include a short-term rebate system tied to the proportion of foreign parts used in vehicles assembled domestically. Automakers have been told they’ll have two years of reduced levies, giving them time to reconfigure supply chains and invest in new US-based facilities.

Officials claim announcements on job creation and plant expansion are expected soon, with companies like Stellantis, Ford, and GM praising the policy shift as a step toward competitiveness rather than an immediate fix.

However, some experts warn that the industry needs stability instead of unpredictable policy swings. They argue that relocating production takes years and billions in investment, not mere months.

With vehicle prices already high and supply chains stretched, economists question whether the tariff adjustments can offset the broader economic risks posed by Trump’s wider trade strategy.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Tech giants circle as Chrome faces possible break-up

Alphabet, Google’s parent company, may soon be forced to split into separate entities, with its Chrome browser emerging as a particularly attractive target.

With Chrome controlling over 65% of the global browser market, interest is mounting from AI-driven firms and legacy tech companies alike, all eager to take control of a platform that reaches billions of users.

OpenAI, known for ChatGPT, sees Chrome as a natural fit for its expanding AI ecosystem, especially with search features increasingly integrated into its chatbot.

Rival AI search firm Perplexity is also eyeing Chrome instead of building from scratch, viewing it as a shortcut to mainstream adoption and a rich source of user data and engagement.

Yahoo, backed by Apollo Global Management, is reportedly considering a $50 billion bid, even while developing its own browser internally.

Despite legal uncertainties and the threat of drawn-out regulatory battles, the opportunity to own Chrome could radically shift influence in the tech sector, especially while Google faces mounting antitrust scrutiny.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

Apple to shift US iPhone assembly to India by 2025

Apple is preparing to assemble all iPhones sold inside the US in India by next year, aiming to produce over 60 million units annually in the country by 2026.

The move comes in response to mounting geopolitical tensions and renewed tariff threats under former President Donald Trump’s trade agenda, which once imposed duties as high as 145% on Chinese imports.

The decision marks a major shift in Apple’s supply chain strategy, which has long depended on China. By doubling production in India, Apple hopes to reduce its exposure to trade-related risks instead of relying on short-term tariff exemptions.

Foxconn’s plant in Tamil Nadu and Tata Electronics are leading the effort, with support from India’s government through manufacturing incentives and subsidies.

While Apple remains dependent on Chinese suppliers for many components, shifting final assembly to India reflects growing urgency. Trump-era tariffs triggered a $700 billion market loss for the company in early 2024, prompting Apple to act swiftly instead of waiting for further shocks.

Around 20% of all iPhones are now made in India, a figure expected to rise sharply in the coming years.

Although challenges remain, such as the complexity of relocating the broader supply chain, analysts believe the shift is crucial for Apple’s long-term growth.

With US production capacity lacking the scale and workforce needed, India presents a more viable solution to ensure continued momentum and price stability in Apple’s most important market.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

TikTok moves into Japanese E-commerce

Chinese social media giant TikTok is preparing to launch its online shopping service in Japan within the coming months, according to a report by the Nikkei newspaper.

The company plans to begin recruiting sellers soon for TikTok Shop, its e-commerce arm that has already made waves in other regions through livestream-based sales of a wide range of products, from footwear to cosmetics.

The move is part of TikTok’s broader strategy to grow internationally, especially while its future in the US remains uncertain. The platform recently expanded into France, Germany and Italy, pushing further into the European market instead of relying solely on existing user bases.

TikTok Shop is known for offering attractive discounts and allowing users to earn commissions by promoting items in live broadcasts.

In contrast, TikTok’s operations in the US continue to face political and regulatory hurdles. A law passed in 2024 requires ByteDance, TikTok’s China-based parent company, to sell off its US assets by January 19.

Although President Donald Trump indicated a deal might still happen, he also suggested any agreement could be delayed due to shifting dynamics in US-China trade relations.

Despite not immediately responding to media requests for comment, TikTok seems determined to strengthen its foothold in international markets.

By entering Japan’s e-commerce space, the company signals it intends to expand through business innovation and regional diversification instead of waiting for political clarity in the United States.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

UN prepares for possible shifts in US financial contributions

The United Nations faces renewed financial uncertainty as Donald Trump’s administration reviews all US support for international organisations. Trump has already slashed voluntary funding across multiple UN agencies and withdrawn from bodies like the World Health Organization and the Human Rights Council.

A leaked White House memo even suggests that cuts to assessed contributions—mandatory payments that keep core UN operations running—are on the table, sparking fears of a major financial crisis. While a complete US withdrawal from the UN is seen as unlikely, experts warn that the US could cripple the organisation by indefinitely halting payments, creating a gaping hole in its budget.

In 2023, the US contributed around $13 billion to the UN, covering about a quarter of its budget. The potential for missed payments raises concerns not just about immediate financial collapse, but about the future of multilateralism itself, drawing parallels to the League of Nations’ demise in the early 20th century.

The situation is complicated by internal divisions within the Republican Party, with some favouring a transactional approach to UN reform while others push a hardline, anti-multilateralist agenda. With peacekeeping budget negotiations looming and no US ambassador to the UN yet appointed, uncertainty dominates.

Meanwhile, UN Secretary-General António Guterres has launched the UN80 initiative, aiming to streamline operations and reassure sceptical donors, but it remains unclear if these reforms will be enough to placate Washington.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

WHO battles funding shortfall with new restructure plan

Just weeks before the World Health Assembly, the World Health Organization (WHO) unveiled a major restructuring plan in response to severe financial challenges. WHO Director-General Tedros Adhanom Ghebreyesus announced the streamlining of the agency’s Geneva headquarters, reducing its divisions from ten to four and departments from sixty to thirty-four.

With funding slashed by donor cuts, including the United States’ withdrawal that alone cost WHO $1.2 billion, the agency faces a staggering $600 million deficit this year and anticipates a 45% shortfall in its upcoming $4.2 billion budget. The internal response to the restructuring has been tense.

Staff members expressed frustration at the top-down decision-making process and criticised past spending on what they saw as unnecessary management layers. Although no specific job cut numbers were provided, Tedros confirmed that executive management would bear the initial brunt of the downsizing.

A consulting group, funded by the Bill and Melinda Gates Foundation, has been advising on the changes behind closed doors, further fueling concerns about transparency. Outside experts view the overhaul as a return to a more focused, ‘normative’ WHO, echoing the approach under former Director-General Margaret Chan.

Yet key questions remain unanswered, such as whether costly country offices will be closed or WHO’s activities will shift back to its original mission of setting international health standards. European Union representatives and other member states have also voiced scepticism, demanding a detailed roadmap to sustainability before approving the new budget.

As the World Health Assembly approaches, debates are intensifying. While some see the crisis as a rare opportunity to realign the WHO with its foundational goals, political sensitivities around funding, office closures, and expanding member contributions suggest that achieving consensus will be anything but easy.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

IBM commits $150 billion to US tech

IBM has announced a major investment plan worth $150 billion over the next five years to solidify its role as a global leader in advanced computing and quantum technologies.

The move also aims to support US economic growth by expanding local innovation and manufacturing, instead of relying heavily on overseas operations.

Over $30 billion of the funding will be directed towards research and development, helping IBM advance in areas such as mainframe and quantum computer production.

According to CEO Arvind Krishna, this commitment ensures that IBM remains the core hub of the world’s most sophisticated computing and AI capabilities. The company already operates the largest fleet of quantum computing systems and intends to continue building them in the US.

The announcement comes amid a wider shift among major tech firms investing heavily in US-based infrastructure.

Companies like Nvidia and Apple have each pledged massive sums—Nvidia alone is preparing to invest up to $500 billion—in response to President Donald Trump’s call for greater domestic manufacturing through policies like reciprocal tariffs.

By focusing investment at home instead of abroad, IBM joins a growing list of tech leaders aligning with government efforts to revitalise American industry while maintaining their global competitiveness in AI and next-generation computing.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

ChatGPT adds ad-free shopping with new update

OpenAI has introduced significant improvements to ChatGPT’s search functionality, notably launching an ad-free shopping tool that lets users find, compare, and purchase products directly.

Unlike traditional search engines, OpenAI emphasises that product results are selected independently instead of being sponsored listings. The chatbot now detects when someone is looking to shop, such as for gifts or electronics, and responds with product options, prices, reviews, and purchase links.

The development follows news that ChatGPT’s real-time search feature processed over 1 billion queries in just a week, despite only being introduced last November.

With this rapid growth, OpenAI is positioning ChatGPT as a serious rival to Google, whose search business depends heavily on paid advertising.

By offering a shopping experience without ads, OpenAI appears to be challenging the very foundation of Google’s revenue model.

In addition to shopping, ChatGPT’s search now offers multiple enhancements: users can expect better citation handling, more precise attributions linked to parts of the answer, autocomplete suggestions, trending topics, and even real-time responses through WhatsApp via 1-800-ChatGPT.

These upgrades aim to make the search experience more intuitive and informative instead of cluttered or commercialised.

The updates are being rolled out globally to all ChatGPT users, whether on a paid plan, using the free version, or even not logged in. OpenAI also clarified that websites allowing its crawler to access their content may appear in search results, with referral traffic marked as coming from ChatGPT.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!

AI educational race between China and USA brings some hope

The AI race between China and the USA shifts to classrooms. As AI governance expert Jovan Kurbalija highlights in his analysis of global AI strategies, two countries see AI literacy as a ‘strategic imperative’. From President Trump’s executive order to advance AI education to China’s new AI education strategy, both superpowers are betting big on nurturing homegrown AI talent.

Kurbalija sees focus on AI education as a rare bright spot in increasingly fractured tech geopolitics: ‘When students in Shanghai debug code alongside peers in Silicon Valley via open-source platforms, they’re not just building algorithms—they’re building trust.’

This grassroots collaboration, he argues, could soften the edges of emerging AI nationalism and support new types of digital and AI diplomacy.

He concludes that the latest AI education initiatives are ‘not just about who wins the AI race but, even more importantly, how we prepare humanity for the forthcoming AI transformation and coexistence with advanced technologies.’

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot! 

Quantum encryption achieves new milestone without cryogenics

Computer scientists at Toshiba Europe have set a new record by distributing quantum encryption keys across 158 miles using standard computer equipment and existing fibre-optic infrastructure.

Instead of relying on expensive cryogenic cooling, which is often required in quantum computing, the team achieved this feat at room temperature, marking a significant breakthrough in the field.

Experts believe this development could lead to the arrival of metropolitan-scale quantum encryption networks within a decade.

David Awschalom, a professor at the University of Chicago, expressed optimism that quantum encryption would soon become commonplace, reflecting a growing confidence in the potential of quantum technologies instead of viewing them as distant possibilities.

Quantum encryption differs sharply from modern encryption, which depends on mathematical algorithms to scramble data. Instead of mathematical calculations, quantum encryption uses the principles of quantum mechanics to secure data through Quantum Key Distribution (QKD).

Thanks to the laws of quantum physics, any attempt to intercept quantum-encrypted data would immediately alert the original sender, offering security that may prove virtually unbreakable.

Until recently, the challenge was distributing quantum keys over long distances because traditional fibre-optic lines distort delicate quantum signals. However, Toshiba’s team found a cost-effective solution using twin-field quantum key distribution (TF-QKD) instead of resorting to expensive new infrastructure.

Their success could pave the way for a quantum internet within decades, transforming what was once considered purely theoretical into a real-world possibility.

Would you like to learn more about AI, tech and digital diplomacy? If so, ask our Diplo chatbot!