In June, several factories across Asia reported weak business activity. The main reason is the fear of higher US tariffs, which is making global buyers more cautious. However, there were also small signs of improvement, raising hope that things may be gradually improving. This comes as the region faces a slow economic recovery and growing uncertainty in international trade.
Tariff fears still hurting Asian exports
Many Asian countries rely heavily on exports, especially to major markets like the United States and China. But US President Donald Trump’s tough stance on trade, including new tariffs and more threats to come, is making it harder for Asian manufacturers to grow.
Nevertheless, the latest private survey for June showed mixed results:
- Japan’s factory activity rose for the first time in 13 months. The final PMI (Purchasing Managers’ Index) score was 50.1, just above the 50 mark that indicates growth.
- South Korea’s factories still saw a decline, but at a slower pace than before. The country had been facing months of political uncertainty until a snap presidential election on June 3 provided some relief.
- China’s private factory survey (Caixin PMI) showed growth, rising to 50.4 from 48.3 in May. This was better than expected and was driven by a rise in new orders.
Analysts warn: Weak demand and trade tensions continue
Even with these improvements, experts say there are still many problems. A major problem is weak demand in China and other Asian markets. Wang Zhi, an economist at Caixin Insight Group, said that despite factory activity picking up in June, the problem of “insufficient effective demand” has not yet been resolved.
The biggest concern is what will happen if the United States raises more tariffs. The Trump administration has already imposed heavy taxes on imports from several countries, including China, Japan and South Korea. These taxes make goods more expensive and discourage trade.
Asian countries in a race to make trade deals
To avoid further damage, more than a dozen countries are now working quickly to reach trade deals with the United States by July 9, a key deadline. If they fail, tariffs on their products could rise sharply.
- South Korean Trade Minister Ahn Deok-gyeon said uncertainty about U.S. tariffs and the global recovery will persist into the second half of the year.
- Japan and South Korea have yet to receive any exemptions from U.S. tariffs, especially on key exports such as cars.
- China is still negotiating a major trade deal with the United States, but progress has been slow.
Trade problems may slow Asia’s recovery
Despite signs of hope in June, many problems remain for factories in Asia. Exports from South Korea improved slightly, but shipments to the United States and China are still weak. Ongoing trade tensions, sluggish global demand and political uncertainty are major challenges for the region.
As breaking news emerges around US trade policy, factory leaders in Asia are watching closely. Any new decision from Washington could affect their businesses for months or years to come. Governments and companies are trying to adapt now, hoping to avoid uncertainty and prepare for future growth.
