Diplomacy
Is international free trade coming to an end?
Where in the world is “free trade” really free? The European Union, and maybe China… The number of countries that feel bound to the World Trade Organization (WTO) rules, especially considering the last “protective” measures of the USA, does not go beyond the fingers of one hand.
The Inflation Reduction Act (IRA), signed by Joe Biden, seems to be a continuation of Donald Trump’s “America First” policy to many. The law provides government support for the transition from seemingly innocent fossil fuels to green energy. It is no secret that the role of states in the transition to renewable energy should increase. It does not seem possible to make progress in such a large infrastructure transformation without public intervention.
In the IRA, the issue that bothers EU in particular is government incentives for electric cars. In addition to financial support to automotive companies producing in the United States, tax breaks are also foreseen for consumers. The summary is that an electric Ford, GM or Tesla may cost $7,500 less under this law than an electric Volkswagen or Hyundai, depending on where and how it is produced. Let’s also say that in the IRA, Canada and Mexico are granted exemptions.
South Korea and Japan are also concerned
Of course, this is not just about the EU. Japan and South Korea also have world-renowned automotive companies that produce electric vehicles. These countries also think that the US’s new industrial policy is a violation of international trade rules.
The Japanese government said in a note to the US Treasury Department in early November that the IRA would challenge the competitiveness of Japanese automotive companies in the North American market. Tokyo warned its interlocutor that the new law could deter Japanese manufacturers from making new investments in the United States, which could lead to unemployment in the United States.
The CEO of the Japanese huge company Nissan said the IRA must be given some time before its entry into force. Nissan has a factory in Canton, Mississippi, but according to the CEO, the number of these factories could increase with the IRA. Nissan expects its electric models to account for 40 percent of US sales by 2030.
The South Korean government also said that the implementation of the IRA should be given a minimum of three years. Seoul has also reported that the IRA may violate the free trade agreement signed between the United States and South Korea. Companies like South Korean Hyundai and Kia are expected to increase their investment in the US.
Speaking to Axios, a South Korean official said that the issue almost led to a diplomatic crisis. The United States and South Korea have discussed the issue twice at the presidential level, but it seems unlikely that the Biden administration will make any changes to the law.
South Korea thinks that they cannot meet every request from the USA, for example, they cannot unite against China. Some officials think that US-Japan-South Korea-Taiwan co-operation on the semiconductors issue would have been easier to move forward without the IRA.
Along with the IRA, it is stated that Hyundai Ioniq 5, Kia EV6, Subaru Solterra and Toyota bZ4X models are not impossible to compete in the USA market. Rivian Automotive, Hyundai Motor and Kia Corp recently suggested to the US that the pressure on them could be reduced by arranging “commercial clean cars” regulation for the IRA.
US barrier to chip trade angers Netherlands
Yet another trade that the Biden administration is trying to block with IRA is the chip trade.
The US has recently imposed tight barriers to the sale of advanced chip and chip-making equipment. Dutch and Japanese companies are among the leading companies in this regard.
The United States has not yet reached an agreement with these countries on banning the sale of chips. But it is reported that Dutch chip makers will resist moving out of the Chinese market.
The Netherlands-based ASML is one of the largest suppliers to the global semiconductor industry. A Dutch official told Bloomberg last month that they would protect their own economic interests when it comes to selling chip equipment to China.
Dutch officials have emphasized that the United States should not expect its own countries to unquestionably comply with Washington’s restrictions on China.
Despite this, the Netherlands refuses to sell extremely ultraviolet lithography machines to China under US’ pressure. But ASML continues to sell less advanced chip-making systems to China.
US pressure on ASML and Japanese firm Tokyo Electron continues. ASML told its staff in the US to stop doing business with Chinese customers as a result of a new regulation that came into force in the US in October.
Dutch Foreign Trade and Development Co-operation Minister Liesje Schreinemacher insisted last week that his government’s “national security interests are really important”.
Dutch Economy Minister Micky Adriaansens told the Financial Times last week that his country was “very positive” about relations with China and emphasized that Europe and the Netherlands “should have their own strategies” for controlling exports to China.
Macron’s visit and concern in Europe
“Joe Biden wants to strengthen the American economy – to the detriment of Europe,” wrote the German newspaper Die Zeit, while the French economic newspaper Les Echos cited “America First, Europe Last.”
The fact that French President Emmanuel Macron was greeted like a king in Washington last week does not seem to have solved the problem. US President Joe Biden admitted there may be flaws in the IRA, but then mentioned the negotiations of the US-EU trade delegations.
Describing the IRA as “super aggressive” during a closed-door meeting with US senators, Macron invited the EU to adopt its own “Europe First” law before heading to the US. French Economy and Finance Minister Bruno Le Maire also suggested that the United States was pursuing a Chinese-style industrial policy.
In a statement with Mr Biden, Macron said it was now time for Europe to “synchronise” itself with US’ steps. This word is thought to refer to the EU’s own state incentives.
French authorities are concerned that European companies, whose operational costs have already risen due to inflation, will start to migrate investment to North America. But Stefano Sannino, secretary-general of the EU’s Foreign Relations Service, who was in Washington for the visit, argued that a scenario in which the United States on one side, and the EU on the other, started to provide incentives would not be “rational”.
At the same time, Denis Redonnet, the EU’s trade chief, said they could report the IRA to the WTO. European Commissioner for the Internal Market Thierry Breton also announced that he will not attend the EU-US Trade and Technology Council meetings later this week. Breton argued that the meetings were insufficient to address the concerns of Europe’s industry and labour ministers, noting instead that Europe would focus on the urgent need to protect the competitiveness of its industrial infrastructure.
EU officials are considering negotiating a free trade agreement between the EU and the United States as another option. However, the fact that this process takes too long and the bureaucratic procedures reduce the possibility of this option.
Meanwhile, Italian automotive companies are more concerned about the entry of Chinese electric cars into the European market than the IRA, according to the Italian newspaper La Stampa. The Germans fear the IRA more than the Chinese.
Czech Trade Minister Jozef Síkela reminded in November that the People’s Republic of China would be the winner of the EU-US trade wars.
Giga factory investments multiply in the US
We can say that the fears of Germans and the French are coming true. While Europeans are worried about the US “sucking up” investment in Europe, alarm bells are ringing in battery production.
Until recently, Europe’s production of lithium-ion batteries was a league ahead of the United States. But with the rise in energy prices and the IRA, the picture seems to have changed.
Since the day the IRA was announced, there has been a 35 percent increase in capacity in the United States. That’s 17 percent in Europe. Despite all this, Europe is still far ahead of the United States in terms of capacity. In 2031, Europe’s annual production capacity is estimated to be 1,186.2GWh, and the US 957.6GWh.
The Turkish company Kontrolmatik announced that it is considering increasing the size of the giga factory in the United States, while Norway-based FREYR announced that it will accelerate its plans in the United States. In Europe, there are reports that such plans have been delayed.
Towards a European protectionism
“The new ambitious industrial policy from our competitors requires a structural response,” said European Commission President Ursula von der Leyen, delivering the message that the EU will start playing by the rules: “Europe will always do what is right for Europe.”
According to Estonian Entrepreneurship Minister Kristjan Järvan, the EU has always supported free trade, and this was a good thing, but “non-democratic forces” were now using free trade against the EU.
Trying to balance the trade wars between the US and China for a long time, Brussels may now start to change its attitude towards friendly fire as Joe Biden jumps on the “protectionist” train. Von der Leyen’s speech Sunday also suggested that the EU should reconsider its own state subsidies.
“There is a risk that the IRA will lead to unfair competition, close markets, and dismantle the same critical supply chains that have already been challenged by COVID-19,” Leyen said, bringing up the possibility that manufacturers will move from Europe to the US.
The fear of subsidies in the EU’s ultra-liberal and pro-free trade departments is at a heightened level. European Commissioner for Trade Valdis Dombrovskis, among them, argued that the subsidy race would be “expensive and inefficient”. EU competition chief Margrethe Vestager said no one wants a subsidy war.
However, the genie has definitely came out of the bottle. If EU takes a step towards government incentive, it will be the last nail to be put in the coffin of international free trade, which hasn’t been really practiced for a long time.
Diplomacy
Anthropic uncovers Claude use by Iranian, Houthi, and Russian units
Artificial intelligence company Anthropic has disclosed attempted “abuses” of its Claude AI model ranging from conventional weapons to biological research by state-linked entities, foreign intelligence services, and cybercrime networks, publishing the findings in a detailed threat intelligence report.
A significant portion of the report comprised the development of guided missile software by the Houthis in northern Yemen and the conversion of the model into a military reconnaissance tool by Iran-linked actors seeking to target US naval assets in the Middle East.
Covering the period between December 2025 and August 2026, the report shared details of activities detected across seven primary areas: cyberattacks, influence operations, mass surveillance, conventional weapons development, biological risks, and unauthorised model distillation.
The company announced that it had terminated all accounts violating its rules and shared the resulting data with relevant international counterparts.
According to findings by Anthropic’s Threat Intelligence unit, a weapons cell based in northern Yemen, where the Houthis operate, substituted human software engineers with the Claude Code system across three distinct missile development programmes.
These efforts comprised a tactical rocket equipped with a terminal guidance system powered by a commercial smartphone processor, a multi-stage ballistic missile with a target range exceeding 2,000 kilometres, and missile designs carrying a hypersonic glide vehicle.
The cell utilised the artificial intelligence to adapt open-source autopilot software to the smartphone processor, optimize flight control algorithms, and compile firmware.
Structuring their Claude accounts like a virtual engineering team, the Houthis assigned one account to write code, another to conduct research, and a third to review and audit the written code.
The report noted that the group conducted an actual test launch with a guided rocket in the Yemeni theatre.
Immediately following the failure of the live-fire test, the actors were documented returning to the Claude platform within hours to upload telemetry data and diagnose the cause of the malfunction.
The cell was observed successfully compiling offline simulation tools capable of operating independently even if access to Claude were severed.
We're publishing our most detailed threat intelligence report to date.
It covers how people tried to misuse Claude—for cyberattacks, influence operations, surveillance, biology, and building weapons—and how we found and stopped them.
We disrupted every operation in the report,…
— Anthropic (@AnthropicAI) September 10, 2026
Iran tracked US warships and personnel
Another military case detailed in the report involved attempts by Iran-linked cyber actors to target US naval forces in the Middle East.
These actors were found to have scraped open-source military data to draft operational targeting manuals directed against American warships and personnel.
Iran extracted name rosters of American military personnel from the captions of publicly accessible military photographs, monitored vessel and aircraft transponder data, authored code to scan commercial satellite imagery, and mapped vulnerabilities in maritime satellite communication terminals.
Other networks linked to the Tehran government were determined to have developed domestic and regional surveillance systems. A Qom-based unit produced a malicious web browser extension disguised as a prayer-time application to harvest credentials from social network users, funneling the data into a central case management system designated “Arman”.
Additionally, official Iranian institutions reportedly cloned authors’ voices using AI and operated multilingual disinformation networks to lay the groundwork for the supreme leadership succession.
Russia also used it for an autonomous kamikaze drone swarm
The report stated that an independent Russia-based software team developed fully autonomous kamikaze uncrewed aerial vehicle swarm software dubbed “DronDoc” or “Serafim”.
Affiliated with a university connected to the Russian Academy of Sciences, the team was said to have trained the artificial intelligence to distinguish between friendly and hostile elements using footage retrieved from the Ukrainian battlefield.
The developed system was designed with the capability to select targets, execute live human classification, and issue detonation commands without requiring human intervention, with simulations run directly against coordinates in the Donetsk region.
Meanwhile, the Russian-origin “Midnight Blizzard” group targeted the Ukrainian drone supply chain and staged attacks aimed at foreign officials and drone engineers by compromising hotel Wi-Fi networks.
A procurement manager stationed at a design bureau in Moscow was also discovered drafting plans via Claude to circumvent European sanctions. The individual was recorded assembling fraudulent tender and logistics correspondence to transport German-made magnetometers, space-grade photovoltaic sheets, and military aviation oxygen systems into Russia through intermediary firms based in China and Hong Kong.
Biological threats and pathogen engineering
The report disclosed five concrete cases regarding the deployment of artificial intelligence in hazardous biological research. Virologists attached to a military research institute were documented using AI for gain-of-function research aimed at enhancing the transmissibility and immune-evasion capabilities of the mosquito-borne Chikungunya virus.
Similarly, experimental designs were prepared to adapt the H5 avian influenza variant, which carries a 50% mortality rate in humans, to mammals and confer airborne transmission capabilities, while immune-evasion mechanisms of pathogens from the smallpox virus family were modelled.
The identities of paralytic neurotoxins subject to export control lists and haemorrhagic fever virus proteins featured on the World Health Organization’s priority epidemic list were deliberately masked and submitted to the AI for analysis.
In addition, a consultant working on behalf of the Malian State Intelligence Service designed a mass surveillance platform designated “Lakana 360” with the assistance of Claude.
The system was designed to monitor approximately 25 million SIM cards registered across three mobile operators in the country without requiring court orders, intercept audio recordings, and cross-reference records with biometric databases.
Separately, leading Chinese artificial intelligence firms including Alibaba, Moonshot, DeepSeek, Zhipu, and Xiaomi were alleged to have initiated hundreds of millions of unauthorised sessions to extract the logical reasoning chains of Claude models. Moonshot and DeepSeek platforms reportedly routed their own users’ queries secretly through Claude, in the process exposing Chinese police surveillance feeds from hundreds of cameras covering military facilities in Chengdu, internal credentials of Chinese state-owned enterprises, and live database access codes connected to the Russian Defence Ministry to third parties.
Türkiye detail in the report
The report also detailed cases involving the abuse of the Claude AI model, incorporating findings concerning an Istanbul-based technology firm.
In case GTG-84005 of the intelligence report, an operation aimed at commercial election manipulation targeting voters in Malaysia was intercepted.
According to the findings, the operation operated under the guise of a startup providing cyber intelligence and counter-disinformation tools. Anthropic determined that Istanbul-based BBS Bilisim Teknolojileri was behind the infrastructure.
According to documents, the company marketed the architecture as a paid influence operation service styled as a “military-grade, AI-powered, real-time political operations ecosystem”.
Managing roughly 1,000 synthetic X accounts, the system processed demographic and electoral data across 222 parliamentary constituencies in Malaysia, calibrating targeting around sensitive social fault lines including ethnicity, religion, and the monarchy.
The network also circulated content from Russian and Chinese state media masquerading as independent Malaysian news via an artificial media outlet designated “Malaysia Pulse”, while manufacturing fraudulent intelligence dossiers targeting an opposition politician and civil society organisations.
Anthropic reported that the network received a request to generate 1 million artificial impressions in support of the Malaysian Prime Minister and sought to secure a contract with the country’s national communications regulatory authority.
While no evidence emerged that the undertaking succeeded, the associated user accounts were closed and operational digital indicators were shared.
Diplomacy
EU pursues closer ties with Israel on space and air defence
The EU is turning to Israel to bolster its new initiatives in high-tech air defence and space capabilities.
Shimrit Maman, head of the Israel Space Agency, travelled to Brussels this week and met on Tuesday with European Commissioner for Startups, Research and Innovation Ekaterina Zaharieva to discuss key sectors, including artificial intelligence and robotics.
The visit took place ahead of European Commission President Ursula von der Leyen’s first major speech on space, scheduled for Thursday at a summit in Paris.
In the speech, Von der Leyen is expected to warn against mounting hostilities and emphasise the necessity of strengthening Europe’s presence in space.
“It’s very hard to do everything by yourself,” Maman told Politico, adding that the militarization of space is “already happening, it’s just we are not aware of the extent,” and noting that allies are showing growing interest in “dual-use” technologies intended for both civilian and defence purposes:
“One thing we’re working on is early-warning systems. For example, during the last wave [of missile attacks] with Iran, we saw this very clearly. How we were getting the alerts to all the civilians in Israel, and that made the casualties so low. This is part of the system. We’re working on a very holistic view, where you can alert in advance, the system alerts the citizens.”
Following several years of effective disengagement caused by political tensions surrounding the invasion of Gaza, the EU has recently begun forging closer military and technological ties with Israel through a series of agreements.
Competition from Washington and strategic rivalry with Moscow and Beijing have nevertheless underlined the requirement for allies possessing sophisticated industrial capacity.
In 2024, European Commission President Ursula von der Leyen backed calls by Polish Prime Minister Donald Tusk and Greek Prime Minister Kyriakos Mitsotakis to create an EU-funded air defence shield.
Three senior officials involved in the discussions said, however, that the plans stalled after officials in the Commission and several national capitals concluded that the project would require reliance on Israeli air defence technology, which was considered too sensitive one year into the Gaza conflict.
Yet Israel’s Rafael, which is expanding its European operations significantly, has now confirmed that it will open a factory to manufacture the Iron Dome air defence system at a former Volkswagen plant in Germany.
One week ago, Greece signed a 3 billion euro agreement with the Israel Ministry of Defense.
The deal provides for the establishment of a new multi-layered air defence network designed to shoot down drones, hostile jets, and rockets.
“We see everything integrating into this multi-layer defence approach,” Maman said, highlighting satellite imagery and artificial intelligence modelling as primary focal points for joint development efforts:
“I’m not only seeing defence as ballistic missiles from Iran… think about a fire, a flash flood or even a long drought… we have a proven track record, and we’re getting really good results.”
Diplomacy
UK reassures US that new Israeli settlement sanctions are symbolic
The UK has reportedly engaged in behind-the-scenes talks to avoid a backlash from the US over anti-Israel sanctions scheduled for announcement today.
According to a report by Bloomberg, Andy Burnham’s government is expected to ban trade with Israeli settlements in the West Bank today.
Burnham is seeking to pursue a firmer stance on an issue of high importance to the governing Labour Party, though one that risks angering US President Donald Trump.
Foreign Secretary Ed Miliband will unveil a new sanctions regime targeting Israel but limited to Jewish settlements in the West Bank, according to sources familiar with the matter.
Burnham and Trump spoke by telephone on Monday, the Prime Minister’s Office said. A statement noted that the two leaders discussed a two-state solution for Israel and the Palestinian territories.
The discussion suggests that Burnham used the call to notify Trump that sanctions against Israel were imminent.
The proposals under review included a new sanctions regime with measures to block the exchange of goods and services with Israeli settlements.
Miliband also evaluated expanding existing human rights sanctions to encompass the blocking of aid, which has drawn criticism for exacerbating the humanitarian crisis in Gaza.
The Foreign Secretary further considered explicitly endorsing the International Court of Justice’s non-binding 2024 opinion that declared Israel’s occupation of territory currently recognised by the UK as the State of Palestine to be unlawful.
Even so, UK officials fear the announcement could cause an early setback in Burnham’s relationship with Trump.
To defuse a backlash from the Trump administration, British diplomats privately informed the US that the sanctions are largely symbolic and will have no tangible impact on the UK’s broader trade or security ties with Israel, according to sources familiar with the discussions.
The proposals were drawn up after Israel decided to issue tenders for the construction of 1,200 settlement housing units in an area of the West Bank.
Disputes between Israeli settlers and Palestinians have intensified in recent months as Israeli Prime Minister Benjamin Netanyahu faces a difficult battle to retain his seat in a general election scheduled for 27 October.
Burnham joined the leaders of Canada and five European governments, including France, Germany, and Italy, in signing a statement that condemned the housing plan as “unacceptable” and urged Netanyahu to withdraw the tender.
In a separate statement, German Chancellor Friedrich Merz condemned a call by Israeli National Security Minister Itamar Ben Gvir for “nightly assassinations” in Gaza.
Burnham is eager to demonstrate early to the Labour Party that he is adopting a more critical approach toward Israel than his predecessor, Keir Starmer.
Although Starmer hardened his stance against Israel during his two years in office, including by formally recognising the State of Palestine, his initial refusal to demand that Netanyahu halt military operations in Gaza divided the party.
This division led to a decline in Labour’s poll ratings and boosted electoral gains for the Green Party across the country.
Burnham’s return to Parliament last month led to Starmer’s resignation. Burnham apologised for Labour’s handling of Israel’s military operation in Gaza under his predecessor, stating that the party “did not adopt the right stance”.
Last month, Burnham’s new Defence Secretary, Wes Streeting, who faced intense competition from a Muslim independent candidate in his northeast London constituency at the last general election, stated that Israel had fallen “short” of international standards.
US Ambassador to Israel Mike Huckabee told the BBC’s “Newsday” programme that there would “undoubtedly” be a US response.
Accusing the Labour Party of “discriminating against the Israeli government”, Huckabee said: “It is like throwing a rock and not knowing where it lands. The UK is a sovereign country and can do as it pleases, but so is the US.”
Republican Florida Congressman Randy Fine also warned that British firms would be barred from doing business with local governments in the state if sanctions were imposed.
In a post on X, Fine said: “Florida has made its stance clear. Any company—or country—that boycotts Israel will be boycotted by Florida.”
Labour MPs and Jewish groups have warned the government that any sanctions against the settlements could amount to a “de facto boycott” of Israeli goods and compromise the safety of British Jews.
-
Europe5 days agoGermany’s CDU drafts tougher citizenship rules to counter AfD
-
Russia2 weeks agoWhat to know about Russia’s upcoming State Duma elections?
-
Europe2 weeks agoMarine Le Pen leads all 2027 French presidential scenarios, poll shows
-
Middle East2 weeks agoIran expands deterrence as Gulf strikes expose US munitions limits, analysts say
-
Diplomacy1 week agoGeoffrey Roberts sees Ukraine war concluding within coming months
-
Europe1 week agoGerman industrial bosses push for return to 40-hour working week
-
Russia2 weeks agoRussia warns NATO over Arctic militarisation and conflict risks
-
Asia2 weeks agoBOJ faces critical rate decision as US presses for faster hikes
