Asia Pacific News
LAST UPDATE: May 16, 2025
Trade envoys of South Korea and China discuss economic partnership
Reuters
South Korea and China are engaging in discussions to strengthen their economic partnership, focusing on areas such as shipbuilding and energy cooperation. These talks aim to mitigate the impact of U.S. tariffs and enhance bilateral trade relations.
Insight
The collaboration between South Korea and China signifies a strategic move to counterbalance the effects of U.S. protectionist policies. By focusing on mutual interests like shipbuilding and energy, both nations aim to fortify their economic ties, ensuring stability and growth amidst global trade tensions. This partnership could serve as a model for other countries seeking to navigate the complexities of international trade dynamics.
China open to resolving economic and trade relations with US offline, ministry says
Reuters
China's Ministry of Commerce has expressed willingness to address economic and trade issues with the U.S. through offline discussions, emphasizing the importance of mutual respect and equality in negotiations.
Insight
China's openness to offline discussions indicates a pragmatic approach to resolving trade disputes with the U.S. By advocating for mutual respect, China seeks to establish a foundation for constructive dialogue, potentially leading to the easing of tensions and the development of more balanced trade relations. This stance reflects China's broader strategy to maintain economic stability while addressing international concerns.
Japan to seek third round of US trade talks next week, sources say
Reuters
Japan plans to initiate a third round of trade talks with the U.S. next week, aiming to negotiate exemptions from U.S. tariffs on automobiles and auto parts. The discussions may also cover increased imports of U.S. agricultural products and technical cooperation in shipbuilding.
Insight
Japan's proactive engagement in trade negotiations with the U.S. underscores its commitment to protecting its automotive industry while exploring avenues for deeper economic collaboration. By considering concessions in agriculture and shipbuilding, Japan demonstrates flexibility, aiming to achieve a balanced agreement that safeguards its economic interests and strengthens bilateral ties with the U.S.
Trump Says India Offered to Remove All Tariffs on US Goods
Bloomberg
President Donald Trump announced that India has offered to eliminate all tariffs on U.S. goods as part of ongoing trade negotiations, signaling a potential breakthrough in U.S.-India trade relations.
Insight
India's proposal to remove tariffs on U.S. goods represents a significant shift towards liberalizing trade between the two nations. This move could pave the way for enhanced economic cooperation, increased market access, and the strengthening of strategic ties. However, the implementation of such an agreement would require careful consideration of domestic industries and political implications in both countries.
RBI Seeks to Revive Funding Market Vital for Monetary Policy
Bloomberg
The Reserve Bank of India (RBI) is taking steps to rejuvenate the funding market, which is crucial for effective monetary policy transmission. The RBI aims to enhance liquidity and encourage active participation in the unsecured market among lenders.
Insight
The RBI's initiative to revitalize the funding market reflects its commitment to ensuring the smooth transmission of monetary policy. By focusing on liquidity enhancement and market participation, the central bank seeks to bolster financial stability and support economic growth. This approach is particularly pertinent in the context of global economic uncertainties and the need for resilient financial systems.
Sri Lanka restructures nearly $931 million in credit lines with India
Reuters
Sri Lanka has restructured approximately $931 million in lines of credit and buyers' credit facility agreements with the Indian government. This agreement aims to facilitate deeper cooperation on multiple projects, including an energy hub agreed upon during Indian Prime Minister Narendra Modi's recent visit. The restructuring covers seven lines of credit and four buyers' credit facility agreements provided by the Export-Import Bank of India.
Insight
This restructuring signifies a strengthening of economic ties between Sri Lanka and India, highlighting India's role in supporting Sri Lanka's economic recovery. By focusing on collaborative projects like the energy hub, both nations aim to enhance regional energy security and economic integration. This move also reflects India's strategic interest in stabilizing neighboring economies and expanding its influence in South Asia.
Thailand's growth to slow over next 2 years due to tariffs, minister says
Reuters
Thailand's economic growth is projected to slow over the next two years, primarily due to the impact of U.S. tariffs. The Bank of Thailand has cut its key interest rate to 1.75%, the lowest in two years, to support the underperforming economy. The central bank has also revised its 2025 GDP growth forecast down to 2.0%, with a worst-case scenario projecting just 1.3% growth if trade tensions escalate. Inflation forecasts have been lowered, and tourist arrival projections have been reduced.
Insight
The imposition of U.S. tariffs presents significant challenges to Thailand's export-driven economy. The central bank's proactive measures, including interest rate cuts and revised growth forecasts, indicate an attempt to mitigate these challenges. However, the limited policy space and ongoing global trade uncertainties suggest that Thailand may need to explore additional fiscal measures and structural reforms to sustain economic growth. Strengthening domestic demand and diversifying export markets could be crucial strategies in this context.
Thai consumer confidence hits 7-month low in April due to U.S. tariffs
Reuters
Thai consumer confidence declined for the third consecutive month in April, reaching its lowest level in seven months. This downturn is attributed to concerns over U.S. tariffs and a sluggish domestic economic recovery. The consumer index reflects growing apprehension among Thai consumers regarding the economic outlook and personal financial situations.
Insight
The decline in consumer confidence underscores the broader economic impact of U.S. tariffs on Thailand. As consumer sentiment weakens, domestic consumption—a key driver of economic growth—may also decline, potentially leading to a slowdown in various sectors. Policymakers may need to implement measures to boost consumer confidence, such as fiscal stimulus or targeted support for affected industries, to counteract the negative effects of external trade pressures.
Cambodia holds trade talks with U.S. as 49% tariff weighs on outlook
Reuters
Cambodia has initiated trade discussions with the United States to address concerns over a proposed 49% tariff on its exports. The U.S. market accounts for 37.9% of Cambodia's total shipments, with significant contributions from the garments and footwear sectors. These industries are vital to Cambodia's economy and employment. The talks aim to negotiate terms that would prevent the imposition of such steep tariffs, which could have detrimental effects on Cambodia's export-driven economy.
Insight
The potential imposition of a 49% tariff by the U.S. poses a significant threat to Cambodia's key export sectors, particularly garments and footwear. Engaging in proactive trade negotiations reflects Cambodia's strategic approach to safeguard its economic interests and maintain access to crucial markets. Diversifying export destinations and enhancing the competitiveness of domestic industries may also be necessary to reduce vulnerability to such external shocks.
Australia PM Albanese meets Indonesia counterpart in first international visit since re-election
Reuters
Australian Prime Minister Anthony Albanese met with Indonesian President Prabowo Subianto in Jakarta, marking his first international visit since re-election. The leaders discussed enhancing defense cooperation and global trade relations. Albanese emphasized Jakarta as an "indispensable partner," highlighting the importance Canberra places on its relationship with Indonesia. This visit underscores Australia's commitment to strengthening ties with Southeast Asian neighbors.
Insight
Prime Minister Albanese's choice of Indonesia for his first post-election international visit signals Australia's strategic focus on Southeast Asia. Strengthening defense and trade relations with Indonesia aligns with Australia's broader regional engagement objectives. This move may also serve to counterbalance other global influences in the region and promote stability through bilateral cooperation. Continued collaboration could lead to joint initiatives that bolster economic growth and security for both nations.
New Zealand government to set up $112 million social investment fund
The New Zealand government announced the establishment of a $112 million social investment fund aimed at addressing poverty and improving social outcomes. The initiative targets at-risk communities through tailored support and investment in local projects.
Insight
This fund signals New Zealand’s commitment to tackling systemic social issues through targeted and innovative financial tools. By investing in local solutions, the government aims to enhance long-term well-being and reduce economic disparity. The success of such a fund depends on effective allocation, transparent metrics, and community involvement, serving as a possible model for other countries seeking to improve social resilience.
