Introducing

Tian Yong Woon

Tian Yong joined Haver Analytics as an Economist in 2023. Previously, Tian Yong worked as an Economist with Deutsche Bank, covering Emerging Asian economies while also writing on thematic issues within the broader Asia region. Prior to his work with Deutsche Bank, he worked as an Economic Analyst with the International Monetary Fund, where he contributed to Article IV consultations with Singapore and Malaysia, and to the regular surveillance of financial stability issues in the Asia Pacific region.

Tian Yong holds a Master of Science in Quantitative Finance from the Singapore Management University, and a Bachelor of Science in Banking and Finance from the University of London.

Publications by Tian Yong Woon

Asia| Feb 02 2026
Economic Letter from Asia: The AI Resource Race
This week, we examine Artificial Intelligence through an Asian lens, focusing on how the region fits into the broader AI value chain. While the US clearly dominates at the frontier—spanning cutting-edge AI model capabilities, chip design, and data centres—it remains heavily reliant on more foundational segments of the value chain.

We begin with first principles, looking at the raw material inputs required to produce AI chips, where China continues to hold a dominant position (chart 1). We then turn to the chips themselves, highlighting Taiwan’s well-known leadership in advanced semiconductor manufacturing and its critical role for both the US and China (chart 2). That said, recent efforts by both the US and China to reduce external dependence are beginning to show up in the data (chart 3), and could reshape this landscape in the years ahead. Next, while the US still leads in data centre capacity—the infrastructure essential for training and deploying AI models—several Asian economies, notably Malaysia, are seeking to capture a larger share of this rapidly expanding segment. These efforts have been met with strong interest from global technology firms, translating into sizable foreign direct investment inflows (chart 4).

Underpinning the entire AI ecosystem, however, are rapidly rising electricity requirements. China is now the world’s largest consumer of electricity, while other aspiring AI players, including India, will also need to confront the growing energy demands that come with deeper participation in the AI space (chart 5). At the same time, economies that have made significant shifts toward certain renewable energy sources must contend with higher electricity prices. This may create pressure to slow—or in some cases reconsider—the pace of the green transition in order to remain competitive in the intensifying race for AI-related resources (chart 6).

AI chip material production We begin with the most critical raw inputs required to produce AI chips. Beyond silicon—the foundational material on which chips are built—China commands substantial market share and dominance in the production of other key chipmaking materials, notably gallium and germanium. China accounts for a near-total share of global gallium production and roughly 68% of germanium output (chart 1), levels that effectively give it the ability to steer these markets. China has demonstrated this leverage before, most recently through temporary export restrictions on critical minerals enacted last year amid tit-for-tat measures between the US and China. Those controls were eventually paused following a subsequent US–China trade agreement. Even so, the episode served as a stark reminder of China’s strong negotiating position in the semiconductor supply chain—despite the US retaining leadership in the sophistication and advancement of AI models.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Jan 26 2026
Economic Letter from Asia: Forecasts, Chips, and Polls
This week, we take stock of key developments across Asia. The IMF’s latest outlook delivered several positive growth revisions, with India once again seen at the forefront of regional expansion, while China is still seen unlikely to reach a 5% growth target this year should it be adopted (chart 1). Between China and the US, a clear divergence in trade strategies persists. China has continued to pivot toward Asia to sustain relatively robust export growth, while the US has turned inward—effectively narrowing its trade deficit in line with President Trump’s objectives (chart 2). Within Asia, trade ties with China have become increasingly two-way, as China’s share as an export destination has risen steadily over the past decades to rival that of the US for many economies (chart 3).

In the AI space, notable developments emerged following reports that Chinese authorities may soon formally allow domestic tech firms to import Nvidia’s H200 chips. The news could provide a boost to US tech equities, although broader geopolitical risks remain a possible resurgent drag on sentiment (chart 4). Turning to Japan, last week’s Bank of Japan (BoJ) meeting left policy rates unchanged, as expected. However, the BoJ’s latest outlook report delivered upgrades to both growth and inflation forecasts—developments that could pave the way for further monetary tightening (chart 5), albeit likely only after near-term uncertainties, most notably upcoming snap elections, have passed. Ahead of the polls, the yen and Japanese government bonds have come under sustained pressure (chart 6), though short sellers may become more cautious given the risk of official intervention.

The IMF’s World Economic Outlook The International Monetary Fund (IMF) unveiled its updated forecasts last week in its World Economic Outlook (WEO) publication. On growth, World GDP growth for 2026 was revised up by 0.2 ppts to 3.3%, driven by a surge in technology investment, including AI. China and India each saw a 0.3 ppt upgrade to their growth forecasts, while Japan and South Korea received more modest 0.1 ppt upgrades. Within Asia, India continues to be seen as the region’s growth leader (chart 1). By contrast, despite the IMF upgrade, China is still not expected to reach 5% growth this year should it re-adopt such a target, though there has been some discussion of a lower target range of 4.5–5%. On the downside, only a handful of economies saw downgrades; in Asia, the Philippines stands out with a 0.1 ppt downward revision to 5.6% for the year.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Jan 19 2026
Economic Letter from Asia: Shifting Gears
This week, we dive into several key developments across Asia. China’s Q4 GDP marked a further extension of its recent growth slowdown, yet full-year growth still came in exactly at the government’s 5% target for 2025 (chart 1). That said, the road ahead remains challenging, as December’s data delivered a mixed set of outcomes. Encouragingly, new external inroads, starting with Canada’s opening up of EV trade with China, could pave the way for additional opportunities (chart 2). In semiconductors, the latest US tariff measures proved far more limited in scope than initially feared, helping to explain the muted market reaction to the announcement (chart 3). Relatedly, commitments by major Taiwanese chipmakers to expand investment in the US have brought Washington and its largest chip supplier closer together, culminating in a US–Taiwan trade deal (chart 4).

In Japan, attention has turned to the possibility of a snap Lower House election in February. The interim political uncertainty, alongside expectations around future policy, has weighed on the yen and pushed Japanese yields higher (chart 5), with some observers increasingly concerned about the narrowing window to pass the FY2026 budget by April, given the likely dissolution of the Lower House. In South Korea, President Lee’s recent visits to China and Japan point to improving bilateral ties, although he continues to navigate a delicate balancing act amid still-elevated China–Japan tensions. Domestically, elevated house prices and high household debt continue to limit the scope for further monetary policy easing (chart 6).

China Alongside its regular slate of monthly economic releases, China unveiled its Q4 GDP figures earlier today, with the economy expanding by 4.5% y/y during the quarter. While Q4 growth continues the recent trend of deceleration seen over the past few quarters, the outcome brings China’s full-year growth for 2025 right in line with the government’s 5% target (chart 1). This defied expectations among some investors that the economy would fall short. This outcome aligns with earlier discussions that China remained within reach of its growth target despite slowing momentum. That said, the outlook ahead remains challenging. December’s monthly data painted a mixed picture, with declines in fixed asset investment accelerating and retail sales growth cooling further, even as industrial production growth remained relatively resilient.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Jan 12 2026
Economic Letter from Asia: A Bumpy Start
This week, we highlight several pertinent developments that have shaped the start of the year and may carry longer-lasting implications. To begin with, the recent capture of former Venezuelan President Maduro by the US authorities and the subsequent crude oil trade deal could have far-reaching effects—potentially altering China’s imports of Venezuelan crude and broader bilateral trade dynamics (chart 1), as well as global energy supply considerations (chart 2).

In Japan, Prime Minister Takaichi’s reported consideration of early snap elections, if enacted, would likely inject near-term political uncertainty (chart 3). However, should her gambit succeed, it could reduce policy uncertainty and pave the way for more fiscal policy activism. Against this backdrop, it is unsurprising that investors remain divided over the timing of the Bank of Japan’s next policy tightening, although the upcoming Spring wage negotiations (chart 4) ought to provide clearer signals for the monetary policy outlook.

Turning to investor expectations from the latest Blue Chip survey, India is once again seen as the growth leader among major Asian economies, while also poised to record the highest inflation (chart 5). China, by contrast, is expected to deliver sub-5% growth this year alongside muted inflation. Lastly, in Southeast Asia, pockets of geopolitical tension persist—notably between Thailand and Cambodia (chart 6)—as Thailand prepares for snap elections next month.

The US, Venezuela, and China 2026 got off to a turbulent start following a recent US military operation in Venezuela that resulted in the capture of former President Maduro and his transfer to the US to face drug-related charges. In the aftermath, Venezuela’s former vice president (Delcy Rodriguez) was sworn in as interim leader, while US and Venezuelan authorities have reportedly already reached a new crude oil deal. Under the agreement, Venezuela would sell 30–50 million barrels of crude to the US at market prices, with the proceeds controlled by the US. These developments have several potential implications. First, some Venezuelan crude initially destined for China would likely be diverted to the US. China has been the main buyer of Venezuelan oil in recent years, although this is likely underreported in official data (chart 1), which would tighten conditions for the crude-import-dependent country. Second, an eventual increase in Venezuelan crude supply—previously constrained by heavy US sanctions—would likely exert downward pressure on global oil prices, all else equal, although significant challenges remain, as discussed below.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Dec 15 2025
Economic Letter from Asia: Balancing Risks
This week, we assess Asia through a risk lens, given the recent flare-ups across the region. Japan–China tensions, following Japanese Prime Minister Takaichi’s recent remarks on Taiwan, have prompted some retaliatory measures from China, including travel advisories against visiting Japan. This raises the risk of a dent to Japan’s tourism income this year, given the significance of aggregate Chinese tourism expenditure (chart 1), although any such impact would come at a time when Japan is already grappling with the effects of overtourism. Beyond Japan–China relations, investors are also bracing for the Bank of Japan’s (BoJ) final scheduled policy decision of the year, where a rate hike is expected despite Takaichi’s pro-growth fiscal stance. This expectation reflects ongoing yen weakness (chart 2), alongside encouraging results from Japan’s Q3 Tankan survey, among other factors. While the anticipated hike is not, in itself, a risk, the associated increase in financing costs—coupled with the likelihood of higher government bond issuance to support growth objectives—adds to investor concerns.

Risks are also evident in China, particularly after the November data docket showed a continued deterioration in growth across multiple sectors (chart 3). While China’s 5% growth target for the year remains within reach, achieving it appears to hinge on a narrow set of growth drivers, notably trade. On this front, China has defied earlier investor concerns to record a substantial widening of its trade surplus this year, despite a worsening bilateral trade balance with the US (chart 4). However, while supportive of growth, this development risks drawing increased pushback from non-US trading partners that have been absorbing China’s excess capacity.

Elevated risks are also present elsewhere in Asia, particularly in Southeast Asia, where renewed military clashes between Thailand and Cambodia have once again pushed bilateral tensions to the fore (chart 5). Thailand additionally faces political uncertainty ahead of early elections, following Prime Minister Anutin’s dissolution of parliament last week. Lastly, we turn to semiconductor- and AI-related risks, which are especially pertinent to Asia given the dominance—and reliance—of Taiwan and South Korea in the sector. A key risk lies in the current extent of market optimism surrounding future AI-related earnings (chart 6), suggesting greater scope for disappointment than for further upside surprises.

Japan-China tensions Geopolitics will likely remain front and centre in Asia heading into the new year, with several flashpoints carrying the risk of broader regional spillovers. One such case is the recent flare-up in tensions between China and Japan, following new Japanese Prime Minister Takaichi’s parliamentary remarks on Taiwan. Since then, Chinese authorities have rolled out a series of measures — urging Chinese citizens to avoid travelling to or studying in Japan, reinstating an import ban on Japanese seafood, among others. While none of these steps are particularly substantial on their own, they underscore a rapidly deteriorating bilateral dynamic. The economic implications are not trivial. As shown in chart 1, spending by Chinese tourists has historically made up a significant share of Japan’s total inbound tourism receipts — roughly a quarter in recent quarters — with especially strong concentrations in certain regions such as Osaka. Although the absence of Mainland Chinese tourists has been keenly felt since tensions escalated, early indications suggest that increased arrivals from other countries have helped offset some of the shortfall. More recently, a series of close military encounters between China and Japan has further heightened concerns. The risk of miscalculation has grown, raising the possibility of an inadvertent escalation at a time when geopolitical sensitivities in the region are already elevated.
by:Tian Yong Woon
|in:Economy in Brief
Global| Nov 20 2025
Charts of the Week: The Year Ahead
As 2025 draws to a close, the global economy feels caught between relief and unease. Inflation has eased but not fully retreated, monetary-policy cycles are pulling in different directions, markets are oscillating between AI-driven enthusiasm and valuation nerves, and geopolitical tensions are pressing harder on trade, energy and investment flows. Against this backdrop, the twelve themes that follow set out the forces most likely to shape the macro, market and policy landscape in 2026. They range from the pivotal questions around whether AI will deliver visible productivity gains, how far the AI narrative can continue to support markets, and how policymakers will manage an unusually uncertain interest-rate outlook, to the broader pressures created by fiscal strains, climate stress, shifting trade patterns, geopolitical fragmentation, political transitions, and demographic change. Taken together, they offer a map of the terrain investors and policymakers will need to navigate in the year ahead — a world where cyclical dynamics and structural shifts arguably interact more tightly than at any point in the past decade, and where the biggest surprises are likely to emerge from those intersections.

by:Andrew Cates&Tian Yong Woon
|in:Economy in Brief
Asia| Nov 10 2025
Economic Letter from Asia: As the Dust Settles
This week, we review key developments across several Asian economies as the year nears its close. On balance, many of investors’ and policymakers’ worst fears did not materialize. Despite US tariffs, regional exports have shown resilience (chart 1), partly supported by stronger intra-Asia trade, even as exports to the US declined in some cases.

In China, factors including importer front-loading, stronger exports to non-US markets, and government efforts to boost consumption—albeit with potentially one-off effects—have kept the economy on track to meet its 5% growth target this year (chart 2), barring a substantial slowdown in Q4. In Japan, political uncertainty has eased following Prime Minister Takaichi’s rise, though her pro-growth, pro-loose monetary stance has contributed to further yen weakness (chart 3). India, while still likely Asia’s fastest-growing major economy this year, has seen trade setbacks (chart 4) as US–India discussions continue, though recent progress suggests a deal may be near.

However, not all developments in Asia have avoided worst-case outcomes. For example, the Philippines, which has already been hit by a string of storms this year, continues to reel from the effects of Typhoons Fung-wong and Kalmaegi. These storms have highlighted corruption in the Philippines’ flood control systems, rattling investors and pressuring the peso (chart 5), in a manner reminiscent of the rupiah’s decline during Indonesia’s political turmoil earlier this year. In Thailand, political uncertainty continues ahead of general elections eyed at next March, while the expected full return of Chinese tourists has yet to materialize (chart 6).

Trade in Asia For Asia, the year has ultimately not played out as bleakly as investors once feared, particularly on the trade front. Despite US President Trump’s tariffs and a persistent backdrop of uncertainty, export performance in several Asian economies has proven more resilient than expected. This is most clearly reflected in export growth readings for China and key Southeast Asian economies (chart 1), which have remained firm—and at times exceeded expectations—even as China’s shipments to the US fell sharply. Much of this resilience reflects a redirection of exports toward other markets, often within the region. India, however, has seen more limited gains, with exports in US dollar terms struggling to materially surpass last year’s levels.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Nov 03 2025
Economic Letter from Asia: Come Together
This week, we review a wave of key developments across Asia following US President Trump’s tour of the region last week. A central theme concerned countries courting closer ties with the US to avoid harsher actions, while also boosting regional cooperation amid trade barriers and scrutiny of China. This push for closer ties has manifested through new and updated trade agreements—ironically driven by ongoing uncertainty in global trade and supply chains, with US–China relations at the core. A major outcome of Trump’s trip was the new US–China trade agreement, which included the US halving tariffs on Chinese fentanyl-related products to 10%, while China suspended rare earth export controls and resumed soybean purchases vital to the US (chart 1). Perhaps more importantly, the deal signalled a small conciliatory shift and avoided a potentially worse outcome. Beyond the US–China agreement at the APEC Summit in South Korea, the US–South Korea trade deal also gained more clarity. Under the deal, US auto tariffs on South Korea has fallen to 15%, matching the rate applied to Japan and likely providing relief for South Korean automakers (chart 2).

Trump’s visit to Japan was another highlight. Relations with new Prime Minister Takaichi got off to a strong start, and further details emerged on Japan’s previously cited $550 billion investment commitment in the US—substantial even relative to Japan’s existing direct investment there (chart 3). However, specifics on the timing and implementation of the investment remain limited. Meanwhile, at the ASEAN Summit earlier in the week, aside from Trump’s engagements, the bloc officially welcomed its 11th member—Timor-Leste—the first new member in decades—granting it access to the bloc’s mechanisms and potentially supporting a catch-up in economic development (chart 5). Looking ahead, the focus on China and Japan is likely to continue, with China set to release its October trade (chart 6) and CPI data, and Japan scheduled to report employee wages and household spending.

The APEC summit The US and China made a modest but meaningful step forward on trade following the Trump–Xi meeting at the APEC Summit in South Korea. The US lowered tariffs on Chinese fentanyl-related products to 10% from 20% and suspended enforcement of rules targeting subsidiaries of blacklisted firms—previous points of contention for Beijing. In return, China pledged stronger efforts to curb fentanyl flows, paused rare earth export controls for a year, and resumed purchases of US soybeans—significant given its historically large share of US export demand (chart 1). While not a comprehensive reset, these moves eased immediate tensions and helped avert more severe outcomes, including Trump’s previously threatened 100% tariff hike. The tone of the meeting also suggests a more conciliatory shift, though relations remain fragile and the risk of renewed escalation is still material.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Oct 27 2025
Economic Letter from Asia: To the Summit!
This week, attention remains on developments in Asia as US President Trump continues his regional tour. Over the weekend, his visit to Malaysia for the ASEAN–US summit saw a peace deal secured between Thailand and Cambodia, along with several trade agreements with ASEAN economies. Focus now shifts to Trump’s upcoming interactions with Japan’s new Prime Minister Takaichi and China’s President Xi in Japan and South Korea, respectively. A US–China trade deal is highly anticipated, which, if achieved, could boost market sentiment and reduce uncertainty (chart 1). Leading up to these meetings, encouraging Chinese data has emerged, including a significant improvement in industrial profits, suggesting that efforts to curb race-to-the-bottom price competition are beginning to show results (chart 2).

In Japan, apart from the Trump–Takaichi meeting, markets will closely watch the Bank of Japan’s October monetary policy decision (chart 3). While no change in policy rates is expected, the Bank’s updated forecasts will be scrutinized. Japan’s September trade numbers were encouraging (chart 4), but much depends on the US–Japan trade relationship. Still, Japan’s stronger shipments to other economies, if sustained, could help offset potential US-related headwinds. US–India trade talks also remain in focus, with India reportedly planning to reduce purchases of Russian crude oil—a recurring point of contention (chart 5). At the same time, while India has faced reduced imports from the US due to tariffs, increased shipments to other trading partners, particularly in Asia, highlight a broader trend of trade diversification. Finally, while the ongoing AI boom continues to support exports growth across several Asian economies, the risk of overreliance on semiconductor exports deserves emphasis. Some economies would not have recorded year-to-date export growth without the current AI-driven upcycle (chart 6).

The ASEAN and APEC summits Over the weekend, US President Trump arrived in Kuala Lumpur for the ASEAN–US Summit, where he oversaw the signing of a peace deal between Thailand and Cambodia. He also signed several trade agreements, including commitments by four ASEAN members to remove most—or in some cases all—tariffs on US imports, as well as deals with some members on critical minerals cooperation. While these developments are notable for ASEAN watchers, investor attention now turns to Trump’s next stops in Japan and South Korea. In Japan, focus will be on Prime Minister Takaichi’s first meeting with the US President, while in South Korea, markets will watch whether a long-anticipated US–China trade deal can take shape during the APEC summit. Recent signs of easing tensions—namely the likely suspension of Trump’s 100% tariff threats and China’s possible delay of rare earth export restrictions—could help temper regional uncertainty. This, in turn, may lift market sentiment, marking a welcome reversal from the caution seen in prior weeks (chart 1).
by:Tian Yong Woon
|in:Economy in Brief
Asia| Oct 20 2025
Economic Letter from Asia: Clearing the Fog
This week, we examine key developments across China, Japan, and the broader Asian region. In China, the Q3 GDP outturn extended the recent trend of slowing growth amid a still-fluid external backdrop and uneven domestic performance. While exports—and almost by extension, industrial production—continued to support growth, domestic demand remained soft, with retail sales and the property market still facing headwinds (chart 1). Nonetheless, despite growth moderating to 4.8% y/y, a mild source of comfort is that China remains on track to meet its 5% annual growth target, even if Q4 growth eases further to around 4.6% y/y (chart 2). Externally, uncertainty persists. US-China tensions have resurfaced, dampening sentiment in Chinese equity markets after initial post–Golden Week resilience (chart 3). All eyes are now on US-China talks in Malaysia and the Fourth Plenum in Beijing this week for potential policy or strategic signals.

Elsewhere in the region, AI-related optimism continues to drive gains across several Asian equity markets (chart 4). In Japan, political uncertainty has eased slightly as LDP leader Takaichi’s path to becoming the next Prime Minister became clearer following the Japan Innovation Party’s decision to form a coalition with the LDP. That said, economic policy uncertainty remains elevated following the LDP’s recent string of weak election results (chart 5). Finally, attention turns to upcoming monetary policy decisions in South Korea and Indonesia, where further easing appears less certain given domestic considerations (chart 6).

China’s Q3 results China’s Q3 real GDP growth came in at 4.8% y/y, slightly above expectations, though the latest print extends the country’s recent trend of moderating economic momentum. While exports likely helped support growth during the quarter—thanks to China’s diversified export base despite plunging shipments to the US—other sectors continued to show signs of weakness. This uneven growth pattern was echoed in the accompanying September activity data: retail sales growth cooled further, even as industrial production accelerated (chart 1). Meanwhile, property prices extended their multi-year decline, though the pace of contraction continued to slow. Looking ahead, investors are watching to see how China’s recent “super golden week” holidays will feed into Q4 growth indicators. At the same time, renewed US-China tensions threaten to disrupt late-year momentum should new tariff or non-tariff measures take effect soon.
by:Tian Yong Woon
|in:Economy in Brief
Asia| Oct 13 2025
Economic Letter from Asia: Gotta be Golden
This week, we highlight recent developments in China and Japan, alongside movements in gold and their relevance to Asia. Investors remained broadly unfazed after China’s “super golden week” holidays, with equities buoyed by AI optimism despite recent weak economic data (chart 1). US President Trump’s Friday threats of additional 100% tariffs, however, dented sentiment, with the escalation underscoring China’s delicate external environment. This week’s trade figures show a continued divergence, with exports to Asia still growing while those to the US slumped further (chart 2), amid a backdrop of subdued domestic inflation. Attention is also on the IMF’s upcoming economic forecasts for China. Past projections, including the IMF’s July WEO and the World Bank’s recent report, suggest sub-5% growth, though late-year stimulus has sometimes lifted growth above expectations (chart 3).

In Japan, Sanae Takaichi’s victory in the LDP leadership race positions her to become the country’s first female Prime Minister. Yet, the exit of long-time coalition partner Komeito has left much uncertain. Nonetheless, markets have priced in Takaichi’s pro-growth stance, with a weaker yen and rallying equities (chart 4), though rising inflation (chart 5) may constrain policy ambitions. As for gold, the precious metal continues to attract attention, with prices surpassing $4,000 per ounce. The rally has strengthened Asian currencies that are usually correlated with the precious metal, such as the Thai baht. A slower-moving but significant driver of the gold rally remains the accumulation of reserves by major Asian central banks, including China and India (chart 6), likely reflecting efforts to diversify away from the US dollar.

China China has just come out of its “super golden week”, an eight-day stretch of consecutive holidays from October 1st to 8th, resulting from the overlap of the National Day and Mid-Autumn Festival breaks. This extended holiday period was closely watched for a potential spike in domestic tourism, retail spending, and broader growth momentum. Preliminary data show that key retail and catering firms recorded a 2.7% y/y increase in sales, a notable slowdown from the 6.3% growth seen during the Labour Day break earlier this year. This suggests that consumer spending was more restrained during the recent holiday period. Given Beijing’s increasing emphasis on consumption-led growth over traditional drivers such as exports and investment, the health of Chinese consumers has become an ever more critical barometer of the economy. Nonetheless, following the reopening of financial markets after the holidays, equity market enthusiasm — buoyed in part by AI optimism — initially appeared undimmed, despite a weaker run of economic data (chart 1).
by:Tian Yong Woon
|in:Economy in Brief
Asia| Sep 29 2025
Economic Letter from Asia: Tariff Medicine
This week, we examine the recent flurry of global trade developments and their potential impact on Asia. The previous multi-week tariff calm proved short-lived after US President Trump announced 100% tariffs on branded and patented pharmaceutical products last week. A point of relief lies in the exemption of economies such as the EU and Japan, owing to prior agreements on lower sectoral rates. On the flip side, other major exporters to the US, including India and Singapore, now face increased uncertainty (chart 1). Adding to the pressure, Trump also introduced a $100,000 fee on new H-1B visa applications, disproportionately affecting Indian nationals and workers in IT-related sectors, though visa issuance had already been declining in recent months, partly due to seasonality (chart 2).

In India, the central bank meets this week and is likely to pause again on rate cuts, as concerns over rupee weakness (chart 3) take precedence despite lingering growth risks from US tariffs and other headwinds. In China, the government announced it will no longer seek Special and Differential Treatment (SDT) in future WTO negotiations—a significant policy shift. The move comes amid slowing trade growth (chart 4) and ongoing efforts to pivot toward a consumption-led economy. Japan has experienced moderate currency weakness (chart 5) as investors reassess central bank policy ahead of the ruling party’s leadership vote on October 4th. Australia also faces a monetary policy decision this week, with markets expecting a rate hold amid rising price pressures (chart 6) and signs of economic stabilization.

US pharmaceutical tariffs Last week, US President Trump announced new sectoral tariffs, imposing 100% duties on imports of brand-name or patented pharmaceuticals, effective October 1. This marks the first major tariff action in weeks, ending a brief lull in trade tensions. A key point of relief is that prior agreements with certain US trading partners, including the EU and Japan, provide exemptions, meaning the new steep tariff rate will not apply to them. In contrast, countries without such provisions will face the full 100% duty, which is likely to weigh on their growth through reduced export revenues. This includes major exporters to the US such as Switzerland and, in Asia, India and Singapore, among others (see chart 1). It should be noted, however, that the data shown below do not distinguish between generic and branded or patented pharmaceutical products. Additional points of possible relief include the fact that most of India’s pharmaceutical exports are generics, and that many exporters from Singapore already have plans to expand manufacturing capacity in the US.
by:Tian Yong Woon
|in:Economy in Brief