Asia Pacific News
LAST UPDATE: June 30, 2025
China PMI Signals Continued Decline in Manufacturing
China’s official manufacturing PMI for June came in at 49.7, marking the third consecutive month of contraction. Despite a slight improvement from May’s 49.5, the reading reflects ongoing weakness in domestic demand, persistent deflation, and sluggish export orders.
Insight
The continued contraction, despite a marginal rise, underscores deep structural problems in the Chinese economy, such as faltering domestic consumption and a declining real estate sector. Without significant fiscal or monetary stimulus, these issues may hinder recovery.
Taiwan Says It Made Constructive Progress in US Trade Talks
Taiwan reported “constructive progress” in its second round of trade negotiations with the US, particularly focusing on tariff and supply chain issues. The talks are aimed at avoiding upcoming US tariffs and enhancing bilateral trade cooperation.
Insight
Taiwan’s optimistic tone reflects its strategic importance in the US-China tech rivalry, particularly through semiconductors. Continued progress could solidify Taiwan’s economic leverage and improve access to key US markets.
Trump Says ‘Mr Japan’ Unfair on Cars, Floats Keeping 25% Tariff
Former President Trump criticized Japan’s auto trade practices and suggested maintaining a 25% tariff on Japanese car imports if no reciprocal trade improvements are made.
Insight
This move illustrates Trump’s trade strategy centered on aggressive rhetoric and tariff threats to extract concessions. It also reflects ongoing tensions in US-Japan trade relations, especially concerning the automotive sector.
Japan factory output rises, but slower than expected as US tariffs threat looms
Japan’s industrial output rose by 0.5% in May, falling short of the expected 3.5% increase. The modest growth was largely driven by front-loading of shipments ahead of anticipated US tariffs.
Insight
The lower-than-expected output increase highlights vulnerability in Japan’s manufacturing sector. Concerns over US tariffs are dampening business sentiment and could hinder Japan’s economic momentum moving forward.
South Korea says seeking extension to US 90-day tariff pause
South Korea is requesting a continuation of the US 90-day tariff moratorium set to expire on July 9. The discussions are ongoing at both senior and technical levels between the two governments.
Insight
South Korea’s move to seek an extension indicates a cautious approach to protect its export-dependent economy. It also shows a strategic effort to maintain favorable trade terms amid broader US tariff uncertainties.
Agriculture a ‘red line’ in trade talks with US, Indian finance minister tells Financial Express
Reuters
Finance Minister Nirmala Sitharaman told Financial Express that agriculture and dairy are non-negotiable areas (“big red lines”) in ongoing US trade talks before the U.S.’s July 9 tariff deadline. The U.S. is pushing for access to Indian markets in agriculture, ethanol, dairy, alcohol, autos, pharma, and medical devices.
Insight
India is drawing firm boundaries on sensitive sectors such as agriculture and dairy. Its stance highlights the balancing act between meeting U.S. demands and safeguarding domestic producers, with broader opening expected in less pressured areas like autos and pharmaceuticals.
Thai finance minister to travel to US for trade talks
Thai Finance Minister Pichai Chunhavajira announced he will travel to the U.S. within two days for trade talks. The aim is to prevent U.S. tariffs on Thai goods from rising above those applied to other countries—currently 10% under moratorium, spiking to 36% otherwise.
Insight
Thailand is racing to either lock in lower tariff treatment or extend the moratorium ahead of the July 9 deadline. This proactive diplomatic effort underscores the economic importance of access to U.S. markets for Thai exporters.
Thai economy slows in May on weaker tourism, production, central bank says
The Bank of Thailand reported that in May, tourism revenue and long-haul arrivals slowed, and manufacturing output declined due to inventory adjustments and refinery maintenance. Exports rose sharply thanks to electronics shipments, but overall growth softened. The country recorded a $0.3 billion current account deficit.
Insight
The slowdown, tied to tourism and industrial disruptions, reveals Thailand’s vulnerability in key sectors. Strong exports provide some cushion, but growth remains fragile—highlighting the central bank’s dilemma in navigating external tariff pressures while supporting the domestic economy.
Thai Household Debt Drops to Five-Year Low as New Loans Shrink
Thai household debt declined to its lowest level in five years as new loan issuance slowed, reflecting tighter lending standards and consumer caution. This signals improved household financial health but also points to subdued domestic demand.
Insight
While falling debt levels reduce financial risk, lower credit growth could suppress consumer spending, slowing economic recovery amid export and tourism headwinds.
Indonesia to ease import restrictions ahead of US tariff deadline
Ahead of the U.S. tariff deadline on July 9, Indonesia announced it will ease import restrictions and licensing requirements across 10 commodity groups, including plastics and chemicals. Policy changes are expected to take effect in two months and aim to improve the business environment.
Insight
The move signals Indonesia’s strategy to address U.S. criticisms of trade barriers. By improving market access and regulatory transparency, Indonesia hopes to reduce the risk of U.S. tariff retaliation while boosting domestic industry productivity.
New Zealand Filled Jobs Decline Adds to Signs of Soft GDP Growth
New Zealand reported a decline in filled jobs in May to 2.35 million, the lowest since early 2023. This labor market weakness adds to concerns of sluggish GDP growth amid tightening monetary conditions and global uncertainty.
Insight
Persistent job softness highlights economic cooling, with implications for consumption and inflation. The labor trend may pressure the Reserve Bank to reconsider its policy stance.
