Asian manufacturing hit by tariff worries

Factory activity across much of Asia weakened in June due to ongoing uncertainty over U.S. tariffs, though slight improvements in China, Japan, and South Korea offered cautious optimism ahead of key trade talks.

Private surveys on Tuesday showed slight gains in some economies, but global demand and stalled U.S. talks continue to cloud the outlook.

Japan's manufacturing sector recorded growth for the first time in over a year, and South Korea’s contraction eased. China’s Caixin PMI also showed expansion, supported by rising new orders—contrasting with official data indicating a continued downturn.

Despite these modest improvements, analysts warn that unresolved trade tensions and China’s sluggish domestic recovery continue to weigh heavily on Asia’s manufacturing landscape.

Industry experts in South Korea stressed the need to finalize a trade agreement with the U.S. Meanwhile, exports rebounded overall but remained weak to key markets like the U.S. and China.

Other economies saw ongoing weakness: Indonesia’s PMI slipped to 46.9, Vietnam’s to 48.9, Taiwan’s to 47.2, while Malaysia’s ticked up slightly to 49.3.

Negotiators from more than a dozen U.S. trade partners face a 9 July deadline to avoid tariff hikes, further intensifying pressure on Asian manufacturers who rely heavily on American markets.

Copied