Asia Pacific News
LAST UPDATE: August 1, 2025
China’s manufacturing activity shrinks as exports drag, S&P PMI shows
China’s manufacturing sector contracted in July, with the S&P Global China Manufacturing PMI falling to 49.5 from 50.4 in June, reflecting reduced output and softer new orders as export demand weakened (Reuters). Export orders shrank for a fourth straight month, leading firms to cut jobs and draw down inventories despite rising input costs, underlining persistent external headwinds (Reuters).
Insight
The continued PMI contraction underscores growing external pressures on China’s factory sector, signaling that policy measures may be needed to bolster export competitiveness and domestic demand; targeted stimulus or supply-side interventions could help stabilize manufacturing momentum in the near term (Reuters).
Indonesia’s inflation quickens in July
Indonesia’s annual inflation rate quickened to 2.37% in July, surpassing the 2.25% estimate from economists, driven by rising costs of food, utilities, and education, while remaining within Bank Indonesia’s 1.5%-3.5% target range (TradingView).
Insight
The modest uptick in inflation suggests that domestic price pressures are gaining momentum, potentially narrowing the central bank’s room for further monetary easing; maintaining inflation within target should allow BI to support growth cautiously, but policymakers will likely monitor consumer prices closely to avoid unanchored expectations (TradingView, Reuters).
Taiwan says 20% U.S tariff rate is temporary, aiming to get lower figure
Taiwan’s President Lai Ching-te said the newly imposed 20% U.S. tariff on Taiwanese imports is temporary and that negotiations are underway for a lower rate, with separate discussions planned for semiconductors and ICT products under a national security probe due to conclude in two weeks (Reuters).
Insight
Taiwan’s proactive engagement reflects its reliance on U.S. market access, especially for its semiconductor exports, and highlights the island’s diplomatic strategy to leverage negotiations for more favorable trade terms, which could help mitigate short-term export disruptions and maintain industry confidence (Reuters).
Thailand, Cambodia welcome reduced tariff rates
Thailand and Cambodia welcomed President Trump’s announcement of a 19% U.S. tariff rate, down from the originally threatened 36%, viewing the reduced levy as a significant reprieve that safeguards their export-driven economies (VnExpress International).
Insight
The agreement underscores the effectiveness of the ceasefire-mediated negotiations in Malaysia and highlights how strategic diplomatic interventions can yield tangible economic benefits; the tariff relief should help these nations maintain competitiveness, though implementation details and non-tariff measures will require ongoing coordination (VnExpress International, 南華早報).
Malaysia says U.S. tariff outcome achieved without compromising nation’s sovereign rights
Malaysia’s trade ministry announced that the negotiated 19% U.S. tariff rate on its exports was achieved without compromising the nation’s sovereign rights, following firm stances on key ‘red line’ issues during bilateral talks (TradingView).
Insight
This outcome exemplifies Malaysia’s diplomatic balancing act, securing market access under external pressure while safeguarding policy autonomy; the success may bolster the government’s position domestically and serve as a model for other countries seeking to preserve sovereignty in high-stakes trade negotiations (TradingView).
Malaysian pharmaceuticals, semiconductors exempt from US tariffs, minister says
Malaysia will exempt pharmaceutical products and semiconductors from the upcoming 19% U.S. tariffs, maintaining a 0% duty rate on these strategic sectors, Trade Minister Tengku Zafrul Aziz said, emphasizing that sovereignty red lines remained intact (Reuters).
Insight
The targeted exemptions for pharmaceuticals and semiconductors reflect Malaysia’s prioritization of high-value, innovation-driven industries, which could mitigate potential job losses and support continued investment; this selective tariff relief underscores the government’s ability to protect critical sectors amid broader trade tensions (Reuters).
Relief in Southeast Asia as Trump’s tariffs level playing field
Southeast Asian nations, including Thailand, Malaysia, Cambodia, Indonesia, and the Philippines, expressed relief after the U.S. imposed a uniform 19% tariff on exports, easing concerns over steeper levies and leveling the competitive landscape across the region (Reuters).
Insight
By standardizing tariff rates, the U.S. has reduced regional trade distortions and bolstered the ‘China plus one’ strategy of multinational corporations, potentially attracting further investment into Southeast Asia; however, attention will now shift to non-tariff barriers and rules of origin conditions that will shape long-term trade dynamics (Reuters).
Bangladesh secures 20% US tariff for garments, exporters relieved
Bangladesh negotiated a reduction in U.S. tariffs on its garment exports to 20%, down from the initially proposed 37%, providing relief to its $40 billion apparel sector and aligning its rate with other key exporters like Vietnam and Sri Lanka (Reuters).
Insight
Securing a lower tariff will help preserve Bangladesh’s competitiveness in the global apparel market, safeguarding millions of jobs and export earnings, but the industry must navigate increased import commitments in agricultural products as part of the deal, balancing diplomatic gains with commercial adjustments (Reuters).
Sri Lanka to continue discussions with U.S. on trade tariff
Sri Lanka will continue discussions with U.S. officials to negotiate further reductions of the newly imposed 20% tariff on its exports, according to Treasury Secretary Harshana Suriyapperuma (TradingView).
Insight
The government’s commitment to ongoing talks highlights the critical importance of tariff relief for Sri Lanka’s apparel-driven economy and may help sustain investor confidence; however, the industry’s earlier warnings about job risks under higher levy scenarios underscore the urgent need for concrete outcomes from these negotiations (TradingView, Reuters).
Australia eyes more US exports as Trump holds tariffs at 10%
Australia’s Trade Minister Don Farrell said that after the U.S. retained a 10 % baseline tariff for Australia while imposing higher duties on other partners, Australian exports will enjoy a competitive edge in the American market (Reuters).
Insight
By preserving a low tariff rate for Australia, the Trump administration has inadvertently rewarded effective diplomacy and positioned Australia as a preferred supplier; this may incentivize Canberra to pursue further export diversification into the U.S. (Reuters).
New Zealand to Seek Review of 15% Tariff on Exports to US
New Zealand’s Trade Minister Todd McClay said he will urgently engage U.S. officials to review and reduce the recently imposed 15 % tariff on exports to the U.S., requesting an “urgent call” with the U.S. Trade Representative (Bloomberg.com).
Insight
This initiative reflects New Zealand’s heavy reliance on the U.S. market and its willingness to deploy swift diplomatic measures when trade terms threaten export revenues; success may depend on aligning tariff talks with broader U.S.–Pacific trade strategies (Bloomberg.com).
