Asia Pacific News
LAST UPDATE: July 24, 2025
Japan trade deal sparks hope for US investors, frustration for automakers
A new U.S.–Japan trade agreement cuts tariffs on Japanese car imports from 27.5% to 15%, boosting U.S. stock markets as investors expect broader trade deals, while U.S. automakers express concern that the tariff cut could undermine North American manufacturing competitiveness.
Insight
The deal underlines a growing rift: investors rejoice at potential trade liberalization, but U.S. auto producers fear their domestic operations may suffer, potentially triggering political debates and protective policy responses.
Japan’s factory activity slips into contraction in July, PMI shows
S&P Global data: Japan’s manufacturing PMI dropped to 48.8 in July (from 50.1), signaling renewed contraction—output and new orders fell—while services PMI rose to 53.5, keeping the composite index at 51.5.
Insight
While domestic services remain robust, the decline in manufacturing highlights vulnerabilities in export-oriented sectors—likely exacerbated by ongoing U.S. tariff uncertainties.
US-South Korea trade talks postponed over Bessent schedule as tariff deadline looms
Talks between U.S. Treasury Secretary Scott Bessent and South Korea’s finance/trade ministers were postponed due to a schedule conflict, raising doubts whether Seoul can secure a tariff exemption before the August 1 deadline.
Insight
The delay increases pressure on South Korea to accelerate trade and investment concessions, while reflecting how U.S. trade talks are tightly intertwined across multiple partner nations.
South Korea posts fastest economic growth since early 2024
South Korea’s Q2 GDP rose 0.6% quarter-on-quarter (vs 0.5% expected), driven by strong export growth and rising consumer spending, marking the fastest expansion since early 2024.
Insight
The resilience highlights an export-led recovery bolstered by tech sector demand and domestic consumption, though export momentum may face pressure from upcoming U.S. tariffs.
India’s Economic Activity Sends Mixed Signals in July, PMIs Show
Flash HSBC PMIs: manufacturing activity improved in July, while services activity eased—signaling mixed momentum across India’s economic sectors.
Insight
This divergence suggests a nuanced economic recovery: manufacturing is strengthening, but services—key to GDP growth—are losing steam, posing dilemmas for policymakers balancing inflation and growth.
Thailand F-16 jet bombs Cambodian targets as border clash escalates
Amid escalating border clashes near Ta Moan Thom on July 24, a Thai F‑16 bombed Cambodian military targets; at least 12 dead (11 civilians) and dozens injured. Both nations accuse each other, with Thailand closing borders and diplomatic relations fraying.
Insight
The military escalation marks a sharp escalation in a long-simmering border dispute, with civilian casualties likely to draw regional and international condemnation, raising stakes for ASEAN-mediated diplomacy.
Indonesia negotiating with US for lower tariffs on commodity exports, minister says
Indonesia’s chief economic minister says the country is in talks with the U.S. to lower tariffs on commodity exports amid preparations for implementing a trade deal that would set tariffs around 19%.
Insight
Indonesia is proactively reshaping tariff talks to gain favorable access for its commodity sector, but timing remains sensitive with the August 1 U.S. deadline looming.
Tariff negotiations with US ‘not finished’, says Philippines
The Philippines says talks on its proposed 19% U.S. tariff are ongoing, indicating that more negotiations are expected to refine the agreement.
Insight
Manila is keeping room to maneuver, signalling it aims to secure the best possible threshold for its exports while balancing domestic sector protection.
Australia relaxes curbs on US beef that angered Trump
Australia lifted its biosecurity restrictions on U.S. beef after a comprehensive review, allowing imports of traceably born and slaughtered cattle—addressing U.S. concerns.
Insight
The easing marks a strategic win in trade diplomacy, showing Australia’s leverage in securing U.S. tariff relief through agricultural concessions.
Australia central bank not shocked by jobless rise, to cut rates gradually
Australia’s unemployment rose to 4.3% in June, but the RBA defends its position and signals a gradual rate-cutting strategy, suggesting an expected easing path starting in August.
Insight
The RBA is balancing stable labor markets with inflation dynamics; its cautious tone indicates a gradual pivot rather than a rapid pivot in monetary policy.
RBNZ Says Ready to Cut Rates Further If Price Outlook Softens
New Zealand’s central bank (RBNZ) said it remains prepared to lower its Official Cash Rate from 3.25% if medium‑term inflation pressures continue to ease, noting potential drag from U.S. tariffs on growth and inflation.
Insight
The RBNZ’s stance is cautious and data‑driven: a weaker inflation outlook could prompt further cuts, but global trade headwinds may delay any moves. It underscores proactive planning amid external risks.
