Business Hours

Mon - Fri: 9:00 AM – 5:00 PM

News Update

U.S.–Asia Trade Tensions Escalate as High-Tariff Strategy Meets Diplomatic Recalibration

August 13, 2025

Global markets are bracing for a significant shift in trade dynamics as the U.S. intensifies tariff pressure on India while simultaneously extending a trade truce with China, moves that are reshaping Asia’s economic landscape in real time.

Yesterday, the Trump administration confirmed a 50% tariff on Indian exports, targeting sectors from apparel and jewelry to agricultural goods. The move is largely in response to India’s continued purchase of Russian oil, a sticking point in Washington’s trade and geopolitical calculus. Analysts warn that this could derail Prime Minister Narendra Modi’s “Make in India” manufacturing push, which has been central to the country’s economic strategy.

Indian industry groups are already exploring contingency plans, with some manufacturers considering shifting production to Vietnam or Bangladesh to retain access to U.S. markets.

Despite the pressure, negotiations remain active. U.S. Treasury Secretary Scott Bessent described India as “a bit recalcitrant” in ongoing talks but expressed hope for an agreement before the October deadline—an ambitious target given the scale of the disputes.

Meanwhile, in a contrasting move, Washington and Beijing agreed to extend their trade truce by 90 days. The decision halts the escalation of tariffs and temporarily eases tensions between the world’s two largest economies. Businesses on both sides, from U.S. retailers to Chinese exporters, have welcomed the pause, though challenges over technology, rare earths, and IP rights remain unresolved.

The juxtaposition of punitive measures against India and conciliatory steps toward China underscores the complex, often contradictory strategies driving U.S. trade policy. For Southeast and South Asia, it’s a reminder that geopolitical alignment is now as critical as economic competitiveness.

As the September–October negotiation window approaches, both New Delhi and Beijing will be working to secure their positions, not only to safeguard current trade flows but to shape the global economic order for years to come.

1. Financial Times. (2025, August 12). Donald Trump tariffs threaten Narendra Modi’s ‘Make in India’ drive. https://www.ft.com/content/7b22c7d5-5479-47bb-be6c-475fad9a16c5?utm_source=chatgpt.com

2. Reuters. (2025, August 12). US Treasury’s Bessent says India has been ‘recalcitrant’ in trade talks. https://www.reuters.com/world/india/us-treasurys-bessent-says-india-has-been-recalcitrant-trade-talks-2025-08-12/?utm_source=chatgpt.com

3. AP News. (2025, August 12). US and China extend trade truce another 90 days, easing tension between world’s largest economies. https://apnews.com/article/ad2c003e9a709a1dfdfc9a9fd3798baf?utm_source=chatgpt.com

READ MORE

U.S.–ASEAN at a Turning Point: Trade Friction, Strategic Showcases, and Regional Recalibrations

August 22, 2025

If you’re trying to “lure” Southeast Asia, dumping tariffs on one side and spraying defense packages on the other isn’t exactly poetic. It’s more like trying to woo a friend with a love letter in one hand and a bill in the other.

Take the US-ASEAN Business Council’s blockbuster delegation to Manila, its largest ever, with direct emphasis on aerospace, defense, and industrial presence rather than development or trade collaboration. It’s less a heartfelt embrace and more a: “Trust us, or this jet might just land elsewhere.”

Contrast that with firms relocating operations to Indonesia, not for free land or subsidies, but to dodge punitive U.S. tariffs imposed on Chinese goods. With Indonesian duties around 19%, still high but nowhere near the 30-plus percent being threatened elsewhere, global manufacturers are pragmatically hedging risk, not pledging loyalty. This shift alone has sent industrial real estate prices soaring, even as the nation posts a respectable 5.12% Q2 GDP gain.

Now, let’s talk big-picture economics. Trade isn’t just about the now, it’s about shaping tomorrow’s corridors. With U.S.–ASEAN trade valued near $476 billion in 2024, the U.S. remains a heavyweight partner, not just rhetorically, but financially. Yet, ASEAN’s own blueprint, unveiled this spring, calls for deeper integration, freer movement, and infrastructural interoperability, aiming to become the world’s fourth-largest economy by 2045. It seems ASEAN is increasingly keen to manage its destiny, on its own terms.

And let’s not forget the politics. Malaysia’s PM Anwar Ibrahim recently declared that “this trade war is not a passing storm” during an ASEAN ministers’ meeting. His warning rings loud: ASEAN can’t afford to become the ball in a geopolitical ping-pong match. Regional unity? Far from just ideal, a matter of survival.

ASEAN isn’t sidelined—it’s sizing up both the U.S. and China, and reinforcing its internal coherence. If America wants influence, it may have to choose between cold leverage and warm partnership. Tariffs and hub missions only go so far. In Krugmanesque terms, you don’t build alliances with threats. You build them by building trust, and at present, ASEAN is clearly open, but only to steady hands and long-term vision.

Sources

READ MORE

U.S. Shifts, China Pauses: ASEAN Caught Between Opportunity and Uncertainty

August 25, 2025

The economic and diplomatic landscape between the United States and ASEAN is entering a critical juncture, shaped by policy pivots in Washington, evolving central bank strategies in Southeast Asia, and the looming absence of Chinese leadership at a key summit. Reports from Reuters confirm that Chinese President Xi Jinping is likely to skip the October ASEAN summit, a signal that Beijing may be recalibrating its priorities at a time when Washington is courting the region with renewed vigor. For ASEAN, the symbolism could not be clearer: China’s disengagement risks leaving space for the United States to deepen economic and strategic ties, but the region must decide whether it wants to be a passive beneficiary of great power rivalry or an active architect of its own future.

Meanwhile, Southeast Asia’s largest economy is already making bold moves to stabilize growth. Bank Indonesia surprised markets last week by cutting its benchmark rate to 5.00%, the fifth reduction since September, aiming to support growth while maintaining a stable rupiah and managing inflation effectively. This comes on the back of better-than-expected growth, with Indonesia’s Q2 GDP expanding 5.12% year-on-year, beating expectations and strengthening Jakarta’s case that Southeast Asia can weather global volatility if it acts decisively. Analysts note that Governor Perry Warjiyo has left the door open for further easing, underscoring a proactive stance that contrasts sharply with the caution seen in other emerging markets. The signal to the region is unmissable: in a world where capital flows are shifting rapidly, confidence and adaptability matter as much as raw economic size.

On the U.S. side, the picture looks stronger than many anticipated. S&P Global’s August PMI data shows American business activity is picking up, with the composite index at 55.4 and manufacturing at 53.3, signaling expansion well above expectations. For ASEAN, this is a double-edged sword: a robust U.S. economy fuels demand for Southeast Asian exports, but it also strengthens the dollar, which could complicate capital flows and debt servicing in more vulnerable economies. This is where strategy becomes essential. As one East Asia Forum analysis emphasizes, ASEAN cannot simply ride the waves of U.S. or Chinese demand, it must double down on regional trade liberalization. Studies suggest that greater integration through agreements like RCEP and CPTPP could boost regional GDP by as much as 1.9%, while failing to act risks a 2.3% contraction if fragmentation persists. In other words, unity is not a luxury; it is survival.

The real test for ASEAN will come in the months ahead. The bloc faces a delicate balancing act: managing the optics of Xi’s absence, leveraging U.S. economic momentum, and ensuring its own domestic policies keep growth on track. But beyond the headlines, the deeper question remains whether ASEAN can transform itself from a reactive player to a proactive force in shaping global trade architecture. The stakes are high, and the costs of inaction are steep. For now, the world is watching not just Washington or Beijing, but Jakarta, Bangkok, and Hanoi, because the choices made in Southeast Asia will ripple far beyond its shores.

READ MORE

Southeast Asia Adapts Amid U.S. Tariffs and Regional Economic Shifts

August 27, 2025 

Southeast Asia continues to recalibrate as the ripple effects of U.S. trade policy and global economic shifts reshape the region’s outlook. Recent minutes from the Bank of Thailand reveal a unanimous decision to cut the one-day repurchase rate by 25 basis points to a three-year low of 1.50%, marking the fourth reduction in ten months. This accommodative stance aims to cushion the slowing economy amid persistent U.S. tariffs and shrinking tourism. Despite the challenges, Thailand’s economy is projected to grow around 2.3% this year, dipping to 1.7% in 2026, still above expectations, even as trade imbalances and structural vulnerabilities weigh on longer-term competitiveness.

Meanwhile, Indonesia is moving ahead with diplomatic and trade maneuvers. The U.S. has now agreed in principle to exempt exports of palm oil, cocoa, and rubber from the 19% tariffs recently imposed—a significant win that could come to fruition once a formal agreement is reached. The discussions also include potential investment from the U.S. in Indonesia’s fuel storage infrastructure, linking to national development priorities through partnerships with state entities such as Danantra and Pertamina. Indonesia is optimistic this relief and ongoing talks, particularly with the EU, can help lift its economic growth toward 5.4% by 2026.

The broader trading environment remains complex. Asian manufacturing and factory output have begun to reflect the toll of U.S. trade uncertainty and tariff policy. Survey data show a noticeable slowdown in factory activity in China, Japan, and South Korea, underlining how export-reliant economies are being squeezed by sustained global pressure. Notably, figures for the Philippines and Vietnam buckled this trend, suggesting divergent impacts and reinforcing the importance of diversified trade networks.

For ASEAN businesses and policymakers, navigating this terrain means doubling down on regional integration and resilience. As the U.S.–ASEAN story continues to unfold, economic adaptability and strategic cooperation, not just reaction, will determine long-term outcomes. In this pivotal moment, the region’s strength lies in leveraging trade flexibility, diplomatic engagement, and economic diversification to turn external disruptions into strategic opportunities.

 

Reuters. (2025, August 27). Thai monetary policy should remain accommodative, central bank minutes show. https://www.reuters.com/world/asia-pacific/thai-monetary-policy-should-remain-accommodative-central-bank-minutes-show-2025-08-27/

Reuters. (2025, August 26). Indonesia says US agrees tariff exemption for its palm oil, cocoa and rubber. https://www.reuters.com/world/asia-pacific/indonesia-says-us-agrees-tariff-exemption-its-palm-oil-cocoa-rubber-2025-08-26/

Reuters. (2025, August 1). Global economy: Asia’s factory activity worsens as US trade uncertainty bites. https://www.reuters.com/world/china/global-economy-asias-factory-activity-worsens-us-trade-uncertainty-bites-2025-08-01/

READ MORE

Global Trade Shifts: U.S.–Asia Tensions Redraw Economic Landscapes

As global trade enters a new phase of strategic recalibration, the interplay between the United States and Asia continues to dominate headlines. Across sectors, ranging from agriculture to technology, the spotlight is on evolving tariffs, deepening diplomatic fissures, and shifting supply chains that are redefining economic alliances.

U.S. tariffs are increasingly shaping the strategic calculus of Asian economies. The agricultural sector, long a cornerstone of U.S. exports, is seeing a notable shift: Southeast Asian nations such as Indonesia, Bangladesh, Vietnam, the Philippines, and Thailand are pledging to increase purchases of American wheat, corn, soymeal, and soybeans. The allure? U.S. goods currently outcompete those from traditional exporters on price and trade terms. Indonesia, for one, has committed to 1 million tons of U.S. wheat annually, while Bangladesh sources 700,000 tons, quantities once negligible. Vietnam, too, is ramping up corn imports and eyeing $2 billion worth of broader farm imports, putting U.S. agriculture back in the game across the region.

Still, not all news is bullish. The Asian Development Bank recently trimmed 2025 growth forecasts for developing Asia to 4.7%, down from earlier estimates, citing heightened trade uncertainty, weakening demand, and tariff risks. The ASEAN+3 outlook, including China, Japan, and South Korea, is even softer: projected at just 3.8% for 2025 and 3.6% for 2026, underscoring the chilling effect of trade friction.

Factory floors across Asia show signs of strain under U.S. policy pressures. July surveys find that manufacturing activity in export-heavy economies like China, Japan, and South Korea slipped into contraction. China’s PMI dropped to 49.5, Japan’s fell to 48.9, and South Korea, already in its sixth straight month of decline, registered 48.0. Even more telling, India remained an exception, showing growth, but its business confidence hit a three-year low amid sluggish trade and unresolved deals with Washington.

Further complicating matters, South Korea’s August exports underperformed expectations, weak demand from China and persistent tariff pressures. Notably, exports to Southeast Asia rose an impressive 11.9%, while shipments to Taiwan spiked 39.3%, driven by elevated chip demand. Semiconductor exports rose 27.1%, though petrochemical and petroleum goods declined.

The U.S. Commerce Department has revoked export waivers previously granted to South Korea’s Samsung and SK Hynix for their Chinese operations. That means these chipmaking stalwarts must now apply for licenses to ship U.S. tech to their China-based facilities, allowed only to maintain, not expand, operations. While the immediate damage is muted, the move signals a tightening of U.S. control over tech flows and reshapes the competitive dynamics of the global semiconductor arena.

Amid these economic tremors, strategic alignments are shifting. Chinese President Xi Jinping used a recent summit, flanked by Russian and Indian leaders, to champion a new global economic and security order centered on the “Global South,” offering a clear counterpoint to Western-centric structures.

Complementing this, commentary from The Guardian argues that U.S. tariff policy toward India has backfired, pushing India closer to China and other non-Western blocs. It posits that aggressive U.S. trade tactics may be undermining long-term alliances in favor of short-term gains.

Asian Development Bank. (2025, July 31). ADB lowers 2025 growth forecast for Asia-Pacific, cites weaker exports and local demand. DevelopmentAid. https://www.developmentaid.org/news-stream/post/198153/adb-lowers-2025-growth-forecast-for-asia-pacific-cites-weaker-exports-and-local-demand?utm_source=chatgpt.com

ASEAN+3 Macroeconomic Research Office. (2025, July). Quarterly update of the ASEAN+3 regional economic outlook (AREO), July 2025. AMRO. https://amro-asia.org/quarterly-update-of-the-asean3-regional-economic-outlook-areo-july-2025/?utm_source=chatgpt.com

Financial Times. (2025, September 1). US chipmaking curbs hit Samsung and SK Hynix. https://www.ft.com/content/fd77488c-d5f3-4677-ba90-cc7e8de74333?utm_source=chatgpt.com

Guardian Editorial. (2025, September 1). The Guardian view on Donald Trump and India: The tariff war that boosted China. The Guardian. https://www.theguardian.com/commentisfree/2025/sep/01/the-guardian-view-on-donald-trump-and-india-the-tariff-war-that-boosted-china?utm_source=chatgpt.com

Reuters. (2025, August 1). Asia’s factory activity worsens as U.S. trade uncertainty bites. https://www.reuters.com/world/china/global-economy-asias-factory-activity-worsens-us-trade-uncertainty-bites-2025-08-01/?utm_source=chatgpt.com

Reuters. (2025, August 28). Asia’s pledge to boost US farm imports may redraw trade flows. https://www.reuters.com/world/china/asias-pledge-boost-us-farm-imports-may-redraw-trade-flows-2025-08-28/?utm_source=chatgpt.com

Reuters. (2025, September 1). China’s Xi pushes a new global order, flanked by leaders of Russia and India. https://www.reuters.com/world/china/chinas-xi-pushes-new-global-order-flanked-by-leaders-russia-india-2025-09-01/?utm_source=chatgpt.com

Reuters. (2025, September 1). South Korea’s August exports miss forecast as U.S. tariffs weigh. https://www.reuters.com/world/china/south-korea-august-exports-miss-forecast-us-tariffs-weigh-2025-09-01/?utm_source=chatgpt.com

READ MORE

The Shifting Balance of Global Trade: U.S. Policy and Asia’s Countermoves

Global trade continues to shift under the mounting pressure of U.S. trade policy turbulence, as economies across Asia respond to evolving tariffs, currency maneuvers, and geopolitical alignments. The uncertainty is reshaping supply chains and forcing both governments and businesses to adapt with increasing urgency.

The World Trade Organization (WTO) has sounded a serious warning. According to Director-General Ngozi Okonjo-Iweala, the share of global trade conducted under WTO rules has fallen to just 72%, down from about 80% only a few years ago. She described the decline as the steepest erosion of the global trading system since World War II, driven by escalating use of tariffs as political weapons. The warning underscores how far the world has moved from multilateralism toward fragmented, interest-driven trade blocs.

In Asia, the effects of U.S. tariffs are already visible. India has announced sweeping reforms to its Goods & Services Tax system, slashing rates on hundreds of consumer goods such as appliances, electronics, and small cars. By consolidating tax brackets into just two levels, 5% and 18%, New Delhi aims to stimulate domestic consumption and offset the impact of U.S. tariffs that reach as high as 50% on Indian exports. Economists suggest these measures may temporarily cushion India’s economy, but they also highlight the vulnerability of export-heavy industries when trade partners use tariffs as leverage.

Meanwhile, China is taking a different approach. At the Shanghai Cooperation Organisation summit in Kazakhstan, President Xi Jinping pushed forward a plan to accelerate the use of the yuan in cross-border trade, particularly in Central Asia. The initiative, dubbed the “electro-yuan” strategy, focuses on renewable energy infrastructure and digital finance. Analysts view this as Beijing’s bid to strengthen its financial footprint and erode dollar dominance in regional trade. The move could further tilt the balance of economic power, especially if energy projects succeed in drawing long-term partners away from reliance on the U.S. dollar.

In Washington, political rhetoric is amplifying market anxiety. President Trump suggested that if the U.S. Supreme Court rules against his tariff policies, the government may be forced to “unwind” trade deals with the European Union, Japan, and South Korea. He warned that such an outcome would cause the United States to “suffer so greatly,” adding to the sense of unpredictability surrounding U.S. trade commitments. For Asian economies reliant on stable U.S. access, the possibility of abrupt reversals only deepens uncertainty.

Taken together, these developments illustrate a world in which trade is increasingly shaped by political calculations rather than economic logic. For businesses, this means revisiting assumptions about stable supply chains and predictable trade rules. Exporters must prepare for volatility in tariffs, while investors should monitor currency strategies such as China’s yuan push. Policymakers across Asia, meanwhile, face the delicate task of balancing domestic resilience with global integration at a time when the very foundations of the multilateral system are under strain.

The global trading landscape is becoming less cooperative and more fragmented. For firms operating across U.S.–Asia corridors, adaptability, diversification, and risk management are no longer optional, they are essential.

Associated Press. (2025, September 2). India to cut taxes on hundreds of consumer goods to boost local demand following steep US tariffs. AP News. https://apnews.com/article/9538843a2bde3124004273756b26db6b

Reuters. (2025, September 2). Tariffs cause unprecedented disruption to global trade rules, WTO chief says. Reuters. https://www.reuters.com/world/china/tariffs-cause-unprecedented-disruption-global-trade-rules-wto-chief-says-2025-09-02/

Reuters. (2025, September 3). Trump says U.S. may have to unwind trade deals, will “suffer greatly” if it loses tariff case. Reuters. https://www.reuters.com/world/asia-pacific/trump-says-us-may-have-unwind-trade-deals-will-suffer-greatly-if-it-loses-tariff-2025-09-03/

Reuters Breakingviews. (2025, September 3). Central Asia electro-yuan can be Xi’s summit win. Reuters. https://www.reuters.com/commentary/breakingviews/central-asia-electro-yuan-can-be-xis-summit-win-2025-09-03/

READ MORE

Global Economy Today: US Rate Cut Hopes Rise as Asia Navigates Trade Headwinds

Financial markets are abuzz with heightened expectations of a U.S. Federal Reserve interest rate cut later this month. This potential policy shift in Washington offers a glimmer of relief for Asian economies, which continue to navigate a complex environment marked by slowing growth and persistent, impactful trade tensions.

Latest analyses of the United States economy point to a distinct cooling period, with multiple forecasts indicating a slowdown for the remainder of the year and into 2025. Economic projections from Deloitte highlight emerging concerns of a “modest stagflationary shock” as the robust consumer spending that has long powered the economy begins to wane (Deloitte, 2025).

This morning, all eyes are on the Federal Reserve. Following recent weak jobs data, a consensus is building that the central bank will move to cut interest rates in September. This anticipated pivot is seen as a crucial step to stimulate the slowing economy. The move is also being discussed in the context of a broader global trend where central banks are strategically increasing gold reserves while lessening their dependence on U.S. Treasuries, reflecting long-term fiscal concerns (The Economic Times, 2025).

Across Asia, the economic picture remains varied. The latest Asian Development Outlook from the ADB has revised its growth forecast for the developing nations in the region down to 4.7%, directly citing the challenging external environment created by U.S. tariffs and ongoing trade uncertainty (Asian Development Bank, 2025).

China, the region’s economic powerhouse, is facing a particularly challenging period. While showing resilience earlier in the year, it is now confronting a slowdown amplified by internal issues like deflationary pressure and a crisis in its property sector. The ongoing trade disputes with the U.S. continue to impact its export-driven economy, with recent figures showing a significant drop in exports to the American market (FXStreet, 2025).

India remains a bright spot in the global economy. As of today, it is still on track to be the world’s fastest-growing major economy, with current projections holding at a strong 6.3% to 6.8% for the fiscal year. The nation has successfully managed inflation while boosting exports. However, a new and significant challenge has emerged in the form of 50% U.S. tariffs related to India’s energy trade with Russia, a development that is causing considerable concern (Press Information Bureau, 2025; The Times of India, 2025).

Elsewhere, Japan is charting a course of modest growth, with forecasts remaining below 1%. The impact of U.S. tariffs continues to be a drag on its vital export sector, and the Bank of Japan is now signaling a potential interest rate hike later this year (Dai-ichi Life Research Institute Inc., 2025). In Southeast Asia, a soft start to 2025 has led to downgraded growth forecasts for the rest of the year as the region feels the effects of the global slowdown (McKinsey, 2025).

The economic destinies of the United States and Asia are, as ever, deeply linked. Today, the prospect of an easier U.S. monetary policy offers potential relief for Asian economies burdened by dollar-denominated debt (The Straits Times, 2025). However, this is set against a backdrop of geopolitical and trade frictions that continue to be the primary source of global economic instability. The coming weeks will be critical in determining the direction of the world economy for the remainder of 2025.

Asian Development Bank. (2025, July). Economic forecasts: Asian Development Outlook July 2025. https://www.adb.org/outlook/editions/july-2025

Dai-ichi Life Research Institute Inc. (2025, September). Japan Economic Outlook (September 2025). https://www.dlri.co.jp/english/report_en/202509YS.html

Deloitte. (2025, June 25). United States Economic Forecast Q2 2025. https://www.deloitte.com/us/en/insights/topics/economy/us-economic-forecast/united-states-outlook-analysis.html

FXStreet. (2025, September 8). In China, economic growth remains resilient but the fight against deflation is far from won. https://www.fxstreet.com/analysis/in-china-economic-growth-remains-resilient-but-the-fight-against-deflation-is-far-from-won-202509081705

McKinsey. (2025, June 24). Southeast Asia quarterly economic review: Q1 2025. https://www.mckinsey.com/featured-insights/future-of-asia/southeast-asia-quarterly-economic-review

Press Information Bureau. (2025, July 6). With 6.5% GDP growth, India stands as the fastest growing major economy. https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154840&ModuleId=3

The Economic Times. (2025, September 8). Gold fever: Will central banks keep driving the golden surge? https://m.economictimes.com/news/economy/policy/gold-fever-will-central-banks-keep-driving-the-golden-surge/articleshow/123744682.cms

The Straits Times. (2025, September 8). Fed rate cut would be relief to Asia as it grapples with tariffs: Asian Development Bank. https://www.straitstimes.com/business/economy/fed-rate-cut-would-relieve-asia-as-it-grapples-with-tariffs-adb-says

The Times of India. (2025, September 9). ‘US has long benefitted from free trade’: Chinese envoy slams 50% tariffs on India; calls them ‘unfair, unreasonable’. https://timesofindia.indiatimes.com/business/india-business/us-has-long-benefitted-from-free-trade-chinese-envoy-slams-50-tariffs-on-india-calls-them-unfair-unreasonable/articleshow/123771124.cms

READ MORE

Beyond Tariffs: De-risking and the Future of US-Asia Economic Strategy

September 16, 2025

The economic relationship between the United States and Asia is undergoing its most significant shift in decades. No longer defined solely by trade balances, it is now a complex interplay of geopolitics, technology, and strategic investment. This week, as U.S. and Chinese officials met in Madrid, the conversation extended beyond tariffs toward questions of supply chain security and digital sovereignty.

A TikTok Breakthrough Amid Broader Tensions

The headline development from Madrid is a potential breakthrough on the future of TikTok. According to Reuters and AP reports, U.S. and Chinese negotiators reached a preliminary “framework” agreement designed to avert a nationwide U.S. ban on the app. Details remain under discussion, but the deal could involve shifting TikTok’s U.S. operations to a structure more directly under American oversight. While not final, the move signals that both sides are willing to dial down tensions, at least on issues with strong public visibility.

Beyond TikTok, Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng led discussions on tariffs, technology export controls, and global supply chain resilience. Washington remains committed to its “de-risking” strategy, aimed at reducing reliance on China for critical goods, especially semiconductors and advanced technologies.

The “China-Plus-One” Strategy and Investment Realignment

The U.S. shift is already influencing investment patterns. Multinational companies are increasingly pursuing “China-plus-one” manufacturing strategies, relocating parts of their supply chains to Southeast Asia. According to UNCTAD, foreign direct investment (FDI) into ASEAN grew by about 10% in 2024, even as overall FDI into developing Asia declined slightly. Countries like Vietnam and Malaysia have attracted substantial investment in high-tech industries, although claims of “billions from Microsoft and Google” specifically are better understood as part of a broader trend of tech-sector diversification rather than verified single-company pledges.

For many Asian economies, this presents both opportunity and risk. Governments are seeking to strengthen ties with the United States while maintaining their vital trade relationships with China. Analysts caution that the traditional strategy of “hedging” between the two powers is becoming increasingly difficult as geopolitical frictions deepen.

A Cautious Outlook for a Fractured Global Economy

The wider economic backdrop remains mixed. Asian stock markets rose today, buoyed by expectations of a U.S. interest rate cut, yet underlying data from China continues to show a slowing economy. Some of this weakness is linked to weaker external demand and ongoing trade frictions, raising questions about the durability of China’s growth model.

The IMF projects that Asia will remain the world’s growth leader but warns the region is highly exposed to U.S. demand cycles and rising protectionism. As a result, regional economic integration, through intra-Asian trade and investment, is increasingly seen as critical for resilience.

For businesses and investors, the defining feature of today’s economic landscape is the integration of security considerations into what were once primarily commercial decisions. From building secure supply chains to forging stable political alliances, the search for reliability is reshaping investment flows. As the U.S. and its Asian partners navigate this uncertain terrain, adaptability to shifting policies and geopolitical risks may prove to be the most valuable asset of all.

References

  1. The Times of India: “US-China trade meet: High-level talks begin in Madrid; tariffs and TikTok top the table,” published on September 14, 2025. https://timesofindia.indiatimes.com/business/international-business/us-china-trade-meet-high-level-talks-begin-in-madrid-tariffs-and-tiktok-top-the-table/articleshow/123883206.cms
  2. Hindustan Times: “Last-minute deal on TikTok: Trump to speak to Xi after US-China talks go ‘very well’,” published on September 16, 2025. https://www.hindustantimes.com/world-news/no-ban-on-tiktok-trumps-big-hint-as-us-china-talks-move-forward-101757938978959.html
  3. Bloomberg: “Asian Stocks Set to Gain After Wall Street Rally,” published on September 16, 2025. https://www.swissinfo.ch/eng/asian-stocks-set-to-gain-after-wall-street-rally%3A-markets-wrap/90009109
  4. UN Trade and Development (UNCTAD): “Global foreign direct investment falls for the second consecutive year, posing acute challenges to developing countries,” published on June 19, 2025. https://unctad.org/news/global-foreign-direct-investment-falls-second-consecutive-year-posing-acute-challenges
  5. International Monetary Fund (IMF): “Asia Can Boost Economic Resilience Amid Surging Trade Tensions,” published on April 24, 2025. https://www.imf.org/en/Blogs/Articles/2025/04/24/asia-can-boost-economic-resilience-amid-surging-trade-tensions
  6. Carnegie Endowment for International Peace: “Building Bridges, Countering Rivals: Strengthening U.S.-ASEAN Ties to Combat Chinese Influence,” published on June 10, 2025. https://carnegieendowment.org/posts/2025/06/building-bridges-countering-rivals-strengthening-us-asean-ties-to-combat-chinese-influence?lang=en

 

READ MORE

US-Asia Economic Update: The New Diplomatic Front

September 18, 2025

In a week marked by high-stakes diplomacy, the economic relationship between the United States and Asia is being reshaped not just by market forces, but through negotiations that link trade, technology, and national security.

The latest round of U.S.-China economic talks in Madrid produced a significant outcome: a framework agreement on the future of TikTok. U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng confirmed that both governments have outlined a plan to shift TikTok’s U.S. operations under majority American control, with details still under discussion. The move is designed to address Washington’s national security concerns while ensuring the app’s continued presence in the U.S.

According to officials, Presidents Donald Trump and Xi Jinping are expected to hold a call later this week to review the framework and determine next steps. While the agreement does not finalize every detail, such as ownership stakes and technology licensing, it marks the clearest sign yet that both sides are seeking to prevent further escalation in their tech dispute.

Beyond TikTok, wider shifts in U.S. trade policy are reshaping Asia’s economic outlook. A recent report from the United Nations Conference on Trade and Development (UNCTAD) highlights a “tectonic shift” as Washington introduces differentiated tariffs that sharply increase duties on imports from many developing countries. Some tariff lines have risen above 20 percent, creating new challenges for exporters across Asia and Oceania.

These measures complicate the “China-plus-one” strategy that firms have pursued to diversify supply chains. Countries hoping to attract investment as alternatives to China are now facing higher U.S. trade barriers, forcing governments to weigh new bilateral deals with Washington while maintaining close ties to Beijing.

Asian economies are responding with a mix of caution and adaptation. Regional analysts note a stronger emphasis on intra-Asian cooperation as governments look to buffer against external trade shocks. Meanwhile, investor sentiment remains cautiously positive, supported by expectations of a possible U.S. interest rate cut and tentative progress in U.S.-China talks.

In Taiwan, leading semiconductor firms are exploring deeper investment in the U.S. as part of long-term strategic alignment, even as they navigate new tariff risks in other sectors. Across Asia, companies and policymakers alike are re-evaluating strategies in light of what many see as a more fragmented and politicized trade environment.

For consulting and advisory professionals, the takeaway is clear: today’s global economy is defined less by stable trade regimes and more by shifting alliances, national security considerations, and policy shocks. Navigating this new environment requires not only economic expertise but also geopolitical foresight.

 

READ MORE

At Van Der Consulting, we help businesses navigate their most significant challenges, risks, and transformations. We provide tailored solutions to meet your evolving business needs.

Facebook-f Phone-alt Envelope

Menu

Services

  • Business Strategy & Transformation
  • Restructuring & Transactions
  • Risk Management & Regulatory Compliance
  • Investigations & Dispute Resolution
  • ESG & Sustainability
  • Cybersecurity & E-Discovery

CONTACT US

© Copyright 2025 Vanderconsulting All Rights Reserved. Website By Kengweb.com