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U.S. tightens export controls on China’s chip industry to curb AI and military growth

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The United States has introduced new export controls to limit China’s ability to develop advanced semiconductor technology and slow its progress in military applications and artificial intelligence (AI). These measures, described as the most stringent to date, target both U.S. companies and foreign firms utilizing American technology in chip-making equipment.

The controls include a ban on exporting high-bandwidth memory (HBM) chips to China, a crucial component in AI systems. According to U.S. Commerce Secretary Gina Raimondo, the restrictions are “groundbreaking and comprehensive.” She emphasized their importance, saying, “These are the strongest controls ever imposed by the United States to reduce the People’s Republic of China’s ability to produce the most advanced chips used in its military modernization.”

In addition, the U.S. Department of Commerce will place 140 Chinese entities on its Entity List, often referred to as a “blacklist.” Companies on this list must obtain export licenses, which are expected to be nearly impossible to secure. Notable targets include, Semiconductor Manufacturing International Corporation (SMIC), Huawei Technologies, and Chinese firms involved in chip production equipment manufacturing.

According to the Financial Times, the regulations will affect 24 types of chip-making tools previously untouched. To enforce these rules more effectively, the U.S. will apply the Foreign Direct Product Rule (FDPR), impacting non-U.S. companies using American components or technology.

Notably, some U.S. allies, such as Japan and the Netherlands, have been granted FDPR exemptions after agreeing to adopt their own export controls. South Korea is awaiting a similar waiver. An unnamed U.S. official explained that the FDPR aims to prevent companies from circumventing controls by manufacturing tools in locations like Singapore or Malaysia for export to China.

The strategy reflects internal debates within the Biden administration regarding the extent of controls, particularly on Huawei’s operations. Some facilities of the Shenzhen-based company are not yet operational, raising questions about their capability for producing advanced chips. Officials appear divided, balancing tighter restrictions with the need for cooperation from allies.

Interestingly, some experts, including Gregory Allen, an AI specialist at the Center for Strategic and International Studies (CSIS), have noted that leading U.S. toolmakers, such as Applied Materials, KLA, and Lam Research, are doubling their production capacity outside the U.S.

Despite the robust measures, questions remain regarding why certain Chinese manufacturers, such as CXMT, a producer of HBM, have not been added to the Entity List. Officials believe other restrictions will limit CXMT’s production capabilities, though some have argued for more direct action.

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Trump nominates federal prosecutor Jay Clayton to lead national intelligence agency

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US President Donald Trump, following controversies over experience in Congress, has nominated Jay Clayton, the US Attorney for the Southern District of New York, to lead the Office of the Director of National Intelligence (ODNI), the nation’s most senior intelligence post.

The selection, which will fill the vacancy left by incumbent Director Tulsi Gabbard when she departs on June 30, comes after turbulent weeks following Trump’s appointment of Bill Pulte as acting director.

“There are very few people in the legal community who are as highly respected as Jay,” Trump said in a statement on his social media platform, Truth Social, calling on the US Senate to confirm Clayton’s nomination as quickly as possible.

A political independent, Clayton has served since August 2025 as the US Attorney for the Southern District of New York—a position legal experts describe as the most powerful post within the Department of Justice.

Trump had nominated Clayton to this post shortly after winning the 2024 presidential election, describing him as “a tough fighter for the facts.”

From Wall Street lawyer to federal prosecutor

Born in West Virginia, Clayton began his legal career from 1993 to 1995 as a law clerk to Judge Marvin Katz of the US District Court for the Eastern District of Pennsylvania.

He then worked at the Sullivan & Cromwell law firm from 1995 to 2017, first as an associate and later as a partner. During this period, Clayton represented major financial institutions such as Goldman Sachs, building a multi-million dollar fortune during his time as a Wall Street lawyer.

In 2017, at the beginning of his first presidential term, Trump nominated Clayton to chair the US Securities and Exchange Commission (SEC). During his confirmation process, Clayton pledged to fully sever ties with his law firm and his Wall Street clients, which included Barclays Bank, Royal Bank of Canada, and Deutsche Bank AG.

After the Office of Government Ethics determined that there was no conflict of interest, Clayton was confirmed by the Senate in May 2017 by a 61-37 vote and assumed office.

Then-Senate Majority Leader Mitch McConnell, a Republican, praised the nomination and said he looked forward to Clayton’s leadership, while Democrats, including Senator Elizabeth Warren, voted against him due to his Wall Street ties.

During his tenure as SEC chairman, Clayton frequently testified before Congress on issues such as market integrity, digital asset regulation, cybersecurity, and US-China economic interdependence. After leaving office, he returned to Sullivan & Cromwell while also taking on executive roles at Apollo Global Management and American Express.

He also continued his academic work, serving as an adjunct professor at the University of Pennsylvania Carey Law School since 2009 and at the Wharton School since 2021.

Between 2022 and 2025, he co-chaired the university’s Institute for Law and Economics.

New York prosecution

In June 2020, Trump announced he would appoint Clayton to the post of US Attorney for the Southern District of New York after dismissing then-US Attorney Geoffrey Berman.

Clayton expressed interest in the position but did not comment on whether he was aware that Berman would be dismissed.

The appointment did not materialize at the time, and Audrey Strauss was appointed to the role.

Clayton was nominated again for the US Attorney post for the Southern District of New York in 2025, at the beginning of Trump’s second term.

Clayton sought the office to replace an interim judge who had refused to assist the Department of Justice in dropping charges against New York City Mayor Eric Adams.

Clayton’s appointment, which was not directly confirmed by the Senate, was finalized by the court’s own approval. At the time, The Wall Street Journal commented that Clayton, who typically avoided political controversies, found himself in the midst of a “partisan battle” with this move.

The most notable process conducted by Clayton’s prosecution office was the indictment and litigation process initiated in January against Venezuelan President Nicolás Maduro on charges of “narco-terrorism” and other offenses.

Clayton’s team also played critical roles in reviewing documents related to Jeffrey Epstein and in the case of an Iraqi citizen accused of plotting attacks on US soil on behalf of Iran.

Recently, The New York Times claimed that Clayton spent frequent time with Trump, played golf, and was “often absent” from his office.

Like Bill Pulte, Jay Clayton has no prior experience in the intelligence world. Trump’s previous choice, Bill Pulte, had been accused of targeting Trump’s political opponents by filing criminal complaints over mortgage fraud allegations during his tenure as director of the Federal Housing Finance Agency (FHFA).

While none of these cases resulted in convictions, the Government Accountability Office (GAO) launched an investigation into how the FHFA conducted its investigative processes.

Pulte’s lack of intelligence-gathering experience and the politically charged investigations he initiated drew intense criticism in Congress.

In this new phase, however, members of Congress have reacted more positively to Clayton’s nomination. Republican Senator John Thune said of Clayton, “I think he is a highly qualified professional with great skills to manage complex problems.”

Senator Mark Warner, the ranking Democrat on the committee that will vote on the nomination, also described Clayton as “very qualified.” According to The New York Times, CIA Director John Ratcliffe also supported Clayton’s appointment to the post.

Statements on election security

Days before being nominated as Director of National Intelligence, Clayton appeared as a guest on CNBC, where he addressed the possibility of irregularities in California’s elections.

Speaking about election security during the June 8 broadcast, Clayton said, “We are doing an absolutely terrible job, and the American people are right to question it.”

Arguing that the state’s laws—which allow mail-in ballots to be sent to all voters and allow votes to arrive after Election Day—”create opportunities for irregularities,” Clayton’s claims came at a time when Trump was asserting, without providing any evidence, that the elections were “rigged.”

Jay Clayton, who holds a bachelor’s degree in engineering from the University of Pennsylvania, completed his graduate studies at King’s College, Cambridge. He received his law degree in 1993, also from the University of Pennsylvania.

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US inflation climbs to three-year high as energy prices surge

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US inflation accelerated to 4.2% in May, the highest level since April 2023, driven by a surge in energy prices linked to the Iran war.

Inflation rose above 4% for the first time in three years, though the increase was broadly in line with expectations amid concerns over how far higher energy costs would ripple through the economy.

The reading marked the highest level since April 2023 and exceeded April’s 3.8% rate.

On a monthly basis, inflation increased at a slower pace than in April, potentially signaling that the worst of the recent price pressures may have passed.

Another encouraging sign was a slight decline in gasoline prices.

Asked about the Bureau of Labor Statistics report on Wednesday, President Donald Trump said, “I love inflation,” and argued that oil prices had fallen because “we destroyed 22 ships last night.”

According to the report, much of the increase in inflation stemmed from a 3.9% rise in energy prices, which pushed the 12-month increase in that category to 23.5%.

Core CPI, which excludes the more volatile food and energy components and is widely viewed by analysts as a better indicator of future inflation trends, offered some grounds for optimism.

Core prices rose 0.2% in May, down from a 0.4% increase in April and below analysts’ expectations for a 0.3% gain.

Core goods prices fell 0.1% on a monthly basis, suggesting underlying price pressures remained contained.

On an annual basis, CPI increased 2.9%, in line with economists’ expectations.

Ground beef, roast beef and steak prices declined last month, although the parasitic fly outbreak reported in the United States last week could complicate logistics for farmers and contribute to higher prices.

Food prices rose just 0.2%, while shelter costs — a key component for Federal Reserve policy decisions — increased 0.3%, half the pace recorded in April.

Shelter, which accounts for more than one-third of the CPI basket, rose 3.4% from a year earlier.

Government and industry officials stressed that the insect, whose name has attracted widespread attention, does not pose an immediate threat to food supplies.

Meanwhile, transportation services prices fell 0.6%, potentially indicating that higher energy costs have not yet spread broadly across other sectors.

Similarly, services excluding energy services — another measure closely watched for signs of oil-price pass-through effects — rose 0.3% after increasing 0.5% in April.

New vehicle prices fell 0.3%, while used car and truck prices edged up 0.1%.

However, airline fares, a clearer indicator of energy costs feeding through to consumer prices, rose 2.7%, while motor vehicle insurance prices fell 1.7%.

As for interest rates, few observers expect the Federal Reserve to cut rates when it delivers its first policy statement under new Chair Kevin Warsh next Wednesday.

Market expectations point to just one rate move this year: an increase in December.

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US nuclear weapons spending jumps 22% to $69.2 billion, ICAN says

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US spending on nuclear weapons rose by 22% in 2025 compared with the previous year, according to a report published by the International Campaign to Abolish Nuclear Weapons (ICAN).

Washington spent $69.2 billion on its nuclear arsenal during the year, a figure that exceeded the combined nuclear weapons expenditures of all other nuclear-armed states.

The world’s nine nuclear powers — the United States, Russia, China, the United Kingdom, France, India, Pakistan, Israel and North Korea — increased total spending on their arsenals by 19%, reaching a record $119 billion.

China ranked second in spending with $13.5 billion. The United Kingdom spent $12.6 billion, overtaking Russia to become the third-largest spender. France’s nuclear weapons expenditure reached $7.7 billion.

According to data cited in the ICAN report, nuclear-armed states have spent a combined $471 billion on their arsenals over the past five years.

The report emphasized that the amount spent on nuclear weapons in a single day during 2025 would have been sufficient to provide food for 2 million people for a year, while total annual spending could fund the United Nations’ regular budget for 32 years.

Before those developments, Russian Foreign Ministry Ambassador-at-Large Andrey Belousov commented on the issue.

Belousov said Russia continues to insist on the withdrawal of US nuclear weapons from Europe and the dismantling of all infrastructure established in the region to support their deployment.

Under its nuclear-sharing programme, the United States has stationed nuclear weapons in NATO countries across Europe since the 1950s.

Today, US-made B61 nuclear bombs are stored at military bases in Belgium, Germany, Italy, the Netherlands and Türkiye.

Although NATO does not possess its own nuclear weapons, operational control over those weapons remains with Washington.

Earlier, the Financial Times reported that the United States was considering expanding its nuclear presence in Europe beyond the countries currently participating in the nuclear-sharing programme.

According to the newspaper, Poland and the Baltic states had expressed interest in hosting US nuclear weapons.

Sources cited by the Financial Times linked those discussions to concerns among European allies that the United States could reduce its military presence in the region.

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