Asia Pacific News
LAST UPDATE: August 27, 2025
US tariffs on India hit 50% as Donald Trump-Narendra Modi ties sour
The US imposed 50% tariffs on Indian goods (doubling from 25%) over India’s continued imports of discounted Russian oil, significantly straining US-India relations and threatening key Indian export sectors. Analysts anticipate a drop in exports from $86.5 bn to $50 bn by 2026.
Insight
The sharply escalated tariffs signal a shift from diplomatic goodwill to punitive brinkmanship, underscoring that national strategy has overridden personal rapport in US-India relations; India now faces economic shock in labor-intensive sectors and slower GDP growth.
EXPLAINER-Why India’s Russian oil imports sparked US tariffs amid Ukraine peace talks
The US applied an additional 25% tariff (bringing total to 50%) because it views India’s purchases of Russian oil as indirectly supporting Russia’s war in Ukraine, according to White House trade advisor Peter Navarro.
Insight
The tariffs exemplify how energy procurement can become leverage in geopolitical conflicts—America is punishing third-party actors to pressure Russia, placing energy-security choices in the direct crosshairs of foreign policy.
Sri Lanka set to manage public debt using Commonwealth software from next month
Sri Lanka plans to begin using Commonwealth Meridian software starting next month to manage its public debt, as part of efforts to improve economic recovery and public finance management.
Insight
Adopting Meridian reflects Sri Lanka’s alignment with international best practices in debt transparency and efficiency—critical moves for rebuilding credibility with creditors and multilateral institutions in the country’s economic recovery.
Japan remains cautious on economic impact of tariffs in August report
In its August monthly economic report, Japan noted moderate economic recovery but downgraded views on corporate profits due to US tariffs. While public investment outlook improved, housing construction outlook dropped; private consumption remains on the rebound.
Insight
Japan’s caution underlines the complexity of navigating trade tensions—even amid growth, external shocks like tariffs weigh heavily on profit expectations, highlighting the delicate balance between domestic recovery and global trade pressures.
Taiwan Revamps Cabinet Following Lai’s Political Setbacks
Taiwan’s cabinet underwent a major reshuffle: Kung Ming-hsin, previously cabinet secretary-general and former TSMC board member, became economy minister. Other changes include new health and digital affairs ministers and a newly announced sports ministry led by Olympic champion Lee Yang.
Insight
The reshuffle reflects President Lai’s need to reassert control and effectiveness in the face of legislative gridlock and failed recall campaigns. Placing technocrats and high-profile figures in key ministries could be an attempt to boost governance and public confidence.
Vietnam Opens Up Gold Market in ‘Pivotal Shift’ as Monopoly Ends
Vietnam is ending its state monopoly on gold—in imports, exports, and bar production—opening the gold market to private players. This move is expected to boost supply and align local prices more closely with global levels.
Insight
Liberalizing the gold sector signals a broader economic reform trajectory, reducing state control in favor of market dynamics. The shift may improve liquidity and price efficiency while reflecting confidence in private sector capacity and regulatory foundations.
Thai central bank sees room for accommodative policy in face of second-half challenges
In minutes from its August 13 meeting, the Bank of Thailand signaled that monetary policy should remain accommodative to address second-half challenges, including US tariffs. It had earlier reduced rates by 25 basis points to 1.50%, its fourth cut in ten months.
Insight
Thailand is bracing for prolonged external headwinds, particularly from US-driven trade pressure. Continued rate cuts demonstrate proactive support for slowing tourism and trade, but limited policy space suggests reliance on future fiscal and structural responses.
Thailand still has room to cut rates further, official says
A deputy finance minister said Thailand has room for further interest rate cuts given low inflation and ongoing economic slowdowns, reinforcing that policymakers are monitoring second-half risks from US tariffs and weak global demand.
Insight
The statement reflects an intention to continue dovish monetary stances, emphasizing that the Banque of Thailand remains willing to act if headwinds persist—highlighting the balancing act between supporting growth and preserving financial stability.
Philippine central bank says changes timing of policy decision announcements
The Bangko Sentral ng Pilipinas will start publishing monetary policy decision statements (and holding a livestreamed press conference) at 2:30 p.m. Manila time, beginning August 28.
Insight
This shift enhances transparency and timeliness of communication—allowing markets and the public to respond more promptly and aligning release formats with modern communication standards.
Australia’s inflation tops forecasts as electricity prices surge
In July 2025, Australia’s CPI rose 2.8% year-over-year—well above the 2.3% forecast—primarily due to a 13% spike in electricity prices; core inflation also climbed, reducing near-term rate-cut prospects.
Insight
Elevated inflation, especially from energy costs, may delay Reserve Bank of Australia’s planned easing, keeping monetary policy tighter for longer amid persistent cost pressures.
