Ex-Intel CEO says US manufacturing needs long-term 'patient capital'
KAZUYUKI OKUDAIRA
TOKYO -- Reviving the U.S. manufacturing sector will require patient long-term investment, said former Intel CEO Pat Gelsinger, who focused on long-term planning as head of the American chip giant and is now supporting startups after a pivot into venture capital.
Gelsinger took the helm at Intel in 2021, returning to the company where he had spent three decades of his career. He had sought to revitalize the chipmaker by investing heavily in manufacturing operations but ultimately stepped down this past December amid a clash with the board.
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Yomiuri Shimbun
3 hours ago
- Yomiuri Shimbun
China Is Betting on a Real-World Use of AI to Challenge U.S. Control
SHANGHAI – As the United States and China vie for control over the future of artificial intelligence, Beijing has embarked on an all-out drive to transform the technology from a remote concept to a newfangled reality, with applications on factory floors and in hospitals and government offices. China does not have access to the most advanced chips required to power cutting-edge models due to restrictions from Washington and is still largely playing catch-up with Silicon Valley giants like OpenAI. But experts say Beijing is pursuing an alternative playbook in an attempt to bridge the gap: aggressively pushing for the adoption of AI across the government and private sector. (The Washington Post has a content partnership with OpenAI.) 'In China, there's definitely stronger government support for applications and a clear mandate from the central government to diffuse the technology through society,' said Scott Singer, an expert on China's AI sector at the Carnegie Endowment for International Peace. By contrast, the U.S. has been more focused on developing the most advanced AI models while 'the application layer has been totally ignored,' he said. China's push was on full display in Shanghai at its World Artificial Intelligence Conference, which ran until Tuesday. Themed 'Global Solidarity in the AI Era,' the expo is one part of Beijing's bid to establish itself as a responsible AI leader for the international community. This pitch was bolstered by the presence of international heavyweights like Eric Schmidt, former CEO of Google, and Geoffrey Hinton, a renowned AI researcher often called the 'Godfather of AI.' During the event, Beijing announced an international organization for AI regulation and a 13-point action plan aimed at fostering global cooperation to ensure the technology's beneficial and responsible development. 'China attaches great importance to global AI governance,' Li Qiang, China's premier, said at the opening ceremony on Saturday. It 'is willing to share its AI development experience and technological products to help countries around the world – especially those in the Global South,' he said, according to an official readout. Just last week, President Donald Trump announced a competing plan in a bid to boost American AI competitiveness by reducing regulation and promoting global exports of U.S. AI technology. Washington has moved in recent years to restrict China's access to chips necessary for AI development, in part due to concerns about potential military applications of such models and degrading U.S. tech leadership. The Trump administration's approach to chip policy, however, has been mixed. Earlier this month, the White House reversed a previous ban on specific AI chips made by U.S. tech giant Nvidia being exported to China. This shift occurred amid trade negotiations between the world's two largest economies, which have been locked in an escalating tariff and export control war since Trump returned to the Oval Office earlier this year. There was nothing but excitement about AI in the vast expo center in Shanghai's skyscraper-rich Pudong district, where crowds entered gates controlled by facial recognition. Inside, thousands of attendees listened to panels stacked with Chinese government officials, entrepreneurs and international researchers, or watched demonstrations on using AI to create video games, control robotic movements and respond in real time to conversations via smartglasses. Chinese giants like Huawei and Alibaba and newer Chinese tech darlings like Unitree Robotics were there. DeepSeek was not present, but its name was spoken everywhere. The Hangzhou-based upstart has been at the forefront of Beijing's attempt to push the government use of AI since it released a chatbot model in January, prompting a global craze and driving home China's rapid AI advances. DeepSeek has been put to work over the last six months on a wide variety of government tasks. Procurement documents show military hospitals in Shaanxi and Guangxi provinces specifically requesting DeepSeek to build online consultation and health record systems. Local government websites describe state organs using DeepSeek for things like diverting calls from the public and streamlining police work. DeepSeek helps 'quickly discover case clues and predict crime trends,' which 'greatly improves the accuracy and timeliness of crime fighting,' a city government in China's Inner Mongolia region explained in a February social media post. Anti-corruption investigations – long a priority for Chinese leader Xi Jinping – are another frequent DeepSeek application, in which models are deployed to comb through dry spreadsheets to find suspicious irregularities. In April, China's main anti-graft agency even included a book called 'Efficiently Using DeepSeek' on its official book recommendation list. China's new AI action plan underscores this push, declaring that the 'public sector should take the lead in deploying applications' by embedding AI in education, transportation and health care. It also emphasizes a mandate to use AI 'to empower the real economy' and praises open-source models – which are more easily shared – as an egalitarian method of AI development. Alfred Wu, an expert on China's public governance at the National University of Singapore, said Beijing has disseminated a 'top-down' directive to local governments to use AI. This is motivated, Wu said, by a desire to improve China's AI prowess amid a fierce rivalry with Washington by providing models access to vast stores of government data. But not everyone is convinced that China has the winning hand, even as it attempts to push AI application nationwide. For one, China's sluggish economy will affect the AI industry's ability to grow and access funding, said Singer, who was attending the conference. Beijing has struggled to manage persistent deflation and a property crisis, which has taken a toll on the finances of many families across the country. 'So much of China's AI policy is shaped by the state of the economy. The economy has been struggling for a few years now, and applications are one way of catalyzing much-needed growth,' he said. 'The venture capital ecosystem in AI in China has gone dry.' Others point out that local governments trumpeting their usage of DeepSeek is more about signaling than real technology uptake. Shen Yang, a professor at Tsinghua University's school of artificial intelligence, said DeepSeek is not being used at scale in anti-corruption work, for example, because the cases involve sensitive information and deploying new tools in these investigations requires long and complex approval processes. He also pointed out that AI is still a developing technology with lots of kinks. 'AI hallucinations still exist,' he said, using a term for the technology's generation of false or misleading information. 'If it's wrong, who takes responsibility?' These concerns, however, felt far away in the expo's humming hallways. At one booth, Carter Hou, the co-founder of Halliday, a smartglasses company, explained how the lenses project a tiny black screen at the top of a user's field of vision. The screen can provide translation, recordings and summaries of any conversation, and even deploy 'proactive AI,' which anticipates questions based on a user's interactions and provides information preemptively. 'For example, if you ask me a difficult question that is fact related,' Hou said, wearing the trendy black frames, 'all I need to do is look at it and use that information and pretend I'm a very knowledgeable person.' Asked about the event's geopolitical backdrop, Hou said he was eager to steer clear of diplomatic third rails. 'People talk a lot about the differences between the United States and China,' he said. 'But I try to stay out of it as much as possible, because all we want to do is just to build good products for our customers. That's what we think is most important.' Kiki Lei, a Shanghai resident who started an AI video company and attended the conference on Sunday, seemed to agree with this goal. She said that Chinese AI products are easier to use than U.S. products because companies here really 'know how to create new applications' and excel at catering to, and learning from, the large pool of Chinese technology users. Robots, perhaps the most obvious application of AI in the real world, were everywhere at the conference – on model factory floors and in convenience stores retrieving soda cans, shaking disbelieving kids' hands, or just roaming the packed halls. At the booth for ModelBest, another Beijing-based AI start-up, a young student from China's prestigious Tsinghua University, who was interning at the company, demonstrated how a robot could engage with its surroundings – and charm its human interlocutors. Looking directly at the student, the robot described his nondescript clothing. 'The outfit is both stylish and elegant,' the robot continued. 'You have a confident and friendly demeanor, which makes you very attractive.'
Yomiuri Shimbun
3 hours ago
- Yomiuri Shimbun
Switzerland, the Land of Luxury Brands, Could See Prices Skyrocket from Trump's 39% Tariffs
Prices for the eponymous Swiss watches, Swiss chocolate and Swiss cheese could skyrocket in a week as a result of U.S. President Donald Trump's trade war. Switzerland, home to some the world's most recognizable luxury brands, now faces an upcoming 39% tariff from the U.S. Industry groups on Friday warned that both Swiss companies and American consumers could pay the price. Trump signed an executive order Thursday placing tariffs on many U.S. trade partners — the next step in his trade agenda that will test the global economy and alliances — that's set to take effect next Thursday. The order applies to 66 countries, the European Union, Taiwan and the Falkland Islands. In Switzerland, officials failed to reach a final agreement with the U.S. after Trump initially threatened a 31% tariff in April. Swiss companies will now have one of the steepest export duties — only Laos, Myanmar and Syria had higher figures, at 40-41%. The 27-member EU bloc and Britain, meanwhile, negotiated 15% and 10% tariffs, respectively. Figure came as a surprise The Swiss government spent Friday — the country's National Day — reeling from the news. Swiss President Karin Keller-Sutter said that the 39% figure was a surprise, because negotiators had hashed out a deal last month with the Trump administration that apparently wasn't approved by the American leader himself. 'We will now analyze the situation and try to find a solution,' Keller-Sutter told reporters. 'I can't say what the outcome will be, but it will certainly damage the economy.' The U.S. goods trade deficit with Switzerland was $38.5 billion last year, a 56.9% increase over 2023, according to the Office of the United States Trade Representative. Keller-Sutter said that she believes Trump ultimately chose the 39% tariff, because the figure rounded up from the $38.5 billion goods trade deficit. 'It was clear that the president was focused on the trade deficit and only this issue,' she said. Time is ticking for watch companies For Swiss watch companies, whose products already come with price tags in the tens of thousands — if not the hundreds of thousands — of euros, a timepiece for an arm could cost a leg, too, come next week. The 39% figure was especially galling to the Federation of the Swiss Watch Industry, because Switzerland in 2024 got rid of import tariffs on all industrial goods. 'As Switzerland has eliminated all custom duties on imported industrial products, there is no problem with reciprocity between Switzerland and the U.S.,' the federation said in a statement. 'The tariffs constitute a severe problem for our bilateral relations.' Swiss watch exports were already facing a prolonged slowdown, with significant declines in the United States, Japan and Hong Kong, according to the federation's June figures, the most recent available. Swatch and Rolex declined to comment Friday. Representatives for Patek Philippe, IWC and Breitling didn't respond to requests for comment. Sour taste for Swiss chocolatiers Multinational chocolatiers Nestlé and Lindt & Sprüngli said they have production lines in the U.S. for American customers. But small- and medium-sized Swiss companies are predicted to suffer under the tariffs. Roger Wehrli, chief executive of the Association of Swiss Chocolate Manufacturers. also known as Chocosuisse, said Switzerland exports 7% of its chocolate production to the U.S. It's not just the 39% tariff that's the issue. Once the manufacturers factor in the exchange rate between U.S. dollars and Swiss francs ($1 to 1.23 francs on Friday), Wehrli said, it's close to a 50% increase in costs for the Swiss companies. And that's a big number to pass on to American consumers, if the already-slim margins aren't further reduced. 'I expect that our industry will lose customers in the United States, and that sales volumes will decrease heavily,' he told The Associated Press. Wehrli said that he wants Swiss chocolatiers to sell to other markets around the globe to make up the difference. Still, he hopes American customers remember that Swiss quality beats cheaper quantity. 'I think even if prices for Swiss chocolate increase due to the very high tariffs, I think it's worth (it) to buy Swiss chocolate,' he said. 'It's worth (it) to really eat it consciously and to really enjoy it instead of eating a lot.' Tough pill for Swiss pharmaceuticals Swiss pharmaceuticals powerhouse Roche says that it's working to ensure its patients and customers worldwide have access to their medications and diagnostics amid the Trump tariff war. 'While we believe pharmaceuticals and diagnostics should be exempt from tariffs to protect patient access, supply chains and ultimately future innovation, we are prepared for potential tariffs being implemented and confident in managing any impacts,' the statement said. The company in April announced that it plans to invest $50 billion in the United States over the next five years, creating 12,000 jobs. The company already employs more than 25,000 people in the U.S. Meanwhile, Novartis, another major Swiss pharmaceutical firm, said in a statement that it was reviewing Trump's executive order. 'We remain committed to finding ways to improve access and affordability for patients,' it said.
The Diplomat
7 hours ago
- The Diplomat
Trump's Tariffs on India Imperil India-US Strategic Relationship
In addition to a 25 percent tariff on Indian exports, Trump has announced an 'unspecified penalty' on India for buying Russian oil and arms. President Donald Trump has announced a 25 percent tariff on all Indian exports to the United States, starting August 7. He also announced an 'unspecified penalty' on India for buying oil and weapons from Russia. The tariffs on India are higher than those Trump imposed on India's export peers in Asia, which will likely make Indian goods less competitive in the U.S. market. American importers will choose suppliers in Vietnam or Indonesia, whose goods will come under lower tariffs. Indian goods worth some $87 billion could be affected if the Trump administration implements the new tariffs. It would shave off 0.5 percent from India's GDP growth, according to some estimates. 'They have one of the highest tariffs in the world now, they're willing to cut it very substantially,' Trump told reporters after his social media post on July 30. 'We're talking to India now – we'll see what happens … You'll know by the end of this week,' he added, seemingly keeping a door open for more talks. A U.S. delegation is to arrive in India for more discussions but that will be well past the August 1 deadline set by Trump for countries to seal bilateral deals with Washington. India's reaction was measured. Its Commerce and Industry Ministry said the government had taken 'note' of Trump's remarks and was examining its implications. Both countries were engaged in talks for arriving at a 'fair, balanced and mutually beneficial' bilateral pact, and India remained 'committed' to that goal, it said. The ministry's statement placed India's red lines front and center – i.e., national interest would take precedence during talks with the U.S., as it had for pacts like the Comprehensive Economic and Trade Agreement concluded between India and the U.K. on July 23-24. In his weekly media briefing today, Indian External Affairs Ministry spokesman Randhir Jaiswal said ties between the two countries had 'weathered several transitions and challenges.' The focus, he said, was on the substantive agenda that India and the U.S. have committed to. Trump's announcement of punitive tariffs on India came after he announced trade deals with the Philippines, Japan, Indonesia, the European Union (EU), and South Korea. Pakistan also secured a trade deal that saw its tariff rate lowered to 19 percent. U.S. talks with India's strategic rival, China, are said to be at an advanced stage. Beijing is expected to get off easier as it controls the rare earth elements supply chain that the U.S. industry cannot do without. In his 'Liberation Day' announcement on April 2, Trump had slapped India with 26 percent tariffs. Two Indian officials, whom The Diplomat spoke to separately, said that taking a cue from U.S. deals with Japan, Indonesia, and others, New Delhi had been expecting Washington to impose a 15-17 percent tariff rate on India. India is also upset with the 'unspecified penalty' Trump has imposed on it for its purchase of oil and weapons from Russia. After all, New Delhi has not made any big-ticket arms purchases from Russia since the $5.5 billion S400 Triumf missile system deal in 2018. As a result of its strong ties with the former Soviet Union during the Cold War, a large part of India's defense hardware continues to be of Soviet/Russian origin. However, Moscow's share in Indian defense purchases has fallen over the years. According to the Stockholm International Peace Research Institute, India's arms imports from Russia fell from 72 percent of its total defense purchases in 2010-14 to 55 percent in 2015-19 and 36 percent in 2024. India has been diversifying its defense acquisitions, and France, Israel, and the United States have emerged among its top procurement sources. Additionally, India is also stressing self-reliance in defense procurement. It hopes to purchase more military hardware manufactured by local companies. It does seem that India's refusal to condemn Russia's war in Ukraine, its purchase of discounted Russian oil, and participation in BRICS meetings underlie Trump's imposition of an 'unspecified penalty' on India. Trump's harsh treatment of India has taken New Delhi by surprise. In February, Indian Prime Minister Narendra Modi and Trump had what seemed to be a successful White House meeting, when the start of talks for a trade pact was announced. Both Modi and Trump had then agreed to boost bilateral trade, which is currently worth $129 billion, to $500 billion by 2030. 'Recognizing that this level of ambition would require new, fair-trade terms, the leaders announced plans to negotiate the first tranche of a mutually beneficial, multi-sector Bilateral Trade Agreement (BTA) by fall of 2025,' a joint statement issued after the Modi-Trump talks said. However, things did not unfold as India expected. Several rounds of talks have followed since then in New Delhi and Washington. But these have not narrowed the differences between the two sides. U.S. demands that India open up its sensitive farm and dairy sectors to U.S. imports, and its seeking of relaxed laws on data storage and digital trade, remain sticking points. Ironically, India was among the few countries that was not worried about Trump's second stint in the White House. It had worked well with the first Trump administration, and New Delhi expected Trump 2.0 to be easy to handle. However, Trump's focus on trade, righting deficits, and abandoning friend-shoring for onshoring has put India in a difficult spot. Trump's tariffs will have implications that go beyond trade. It is likely to have a dampening effect on the India-U.S. strategic relationship, which has been carefully nurtured over the past 25 years by the leadership of both countries across administrations, including Trump himself during his first term in office (2017-2021). In recent decades, India and the U.S. have described themselves as 'engaged democracies' rather than 'estranged democracies' as they were known during the Cold War years, when they were on opposite sides. India-U.S. ties have been warming since the year 2000. The high-water mark came when they signed the 2008 India-U.S. civil nuclear deal that helped integrate Asia's third-largest economy into the global nuclear commerce. With the enhancement of strategic trust, India has also been buying defense hardware from the United States. Since 2008, defense procurement from India has shot up to over $20 billion. U.S. Navy ships now make regular calls at Indian ports, and both sides engage in joint military exercises in India and the U.S. India has been looking to emerge as a pole in a multipolar world with help from strategic partners like the U.S. to achieve its ambition of becoming a developed economy by 2047. Trump's intemperate remarks against the India-Russia partnership, his outreach to Pakistan, which he berated in his first term for its support for terrorism, and his overtures to China, besides pressuring India with high tariffs, have cast a shadow over the India-U.S. strategic partnership. Trump is said to have sought a telephone call with Modi. But it is unclear what the Indian prime minister can offer Trump at this stage to get him to reduce the tariff rate. India had been counting on measures like increased purchases of fuel and military hardware from the U.S., besides making changes in its civil nuclear liability law to remove provisions that penalize suppliers of equipment than operators of plants, to woo Trump. Amendments to India's civil nuclear pact would open the doors for U.S. companies to set up plants in energy-starved India, which currently imports more than 80 percent of its fuel requirements. India does not have the resources to promise reciprocal investments, the central offering made by the EU, Japan, and South Korea in their trade deals with the United States. In the short term, India will have to focus on minimizing the consequences of Trump's punitive tariffs, particularly the ones relating to Russian oil. That is because any disruption in supplies will have a major impact on the Indian economy. In the medium term, a Trump visit to India, planned for September-October, may be deferred if there is no trade deal. This could place a question mark over the future of the Quad and the Indo-Pacific. And in the long run, India may have to examine the consequences of an increasingly unreliable United States. There is talk of a revival of the Russia-India-China or RIC trilateral. Russia has been keen to revive the grouping, while India has seemed noncommittal without an explicit no. Any move to revive the group is likely to anger Trump who sees groupings like RIC and BRICS as anti-U.S. In times of global uncertainty, middle and smaller powers do hedge their bets. In India's case though, China is not a partner it can rely on, given its largely acrimonious relationship with Beijing. Given Russia's current heavy dependence on China, Moscow too may not be the partner to India that it once was. That leaves India with not too many options except for making the best of an existing bad situation — a daunting challenge indeed for Indian diplomacy.
