THAILAND, CAMBODIA, MALAYSIA, UNITED STATES
US reduces tariffs on Malaysia, Thailand, and Cambodia to 19%
(01 August 2025) The United States has reduced tariff rates for Malaysia, Thailand, and Cambodia to 19% following a ceasefire between Thailand and Cambodia brokered with Malaysian mediation and US support, enabling President Donald Trump to claim a peacekeeping success. The reductions, confirmed in an executive order issued on 01 August and effective from 7 August, followed trade talks in which all three countries offered concessions to the US, including increased market access and, in Malaysia’s case, the elimination of tariffs on selected US agricultural products and facilitation of halal meat imports. Malaysia had previously faced a 25% rate, Cambodia 49% (then 36%), and Thailand 36%. Malaysia’s Investment, Trade and Industry Minister stated the ceasefire discussions between Prime Minister Anwar Ibrahim and Trump contributed to the revised rate, though Malaysia maintained firm positions on excise duties on alcohol, tobacco, and automotives, foreign equity caps, and digital laws. The Philippines, Indonesia, and Viet Nam had earlier secured rates of 19–20%, while Singapore, Brunei Darussalam, Lao PDR, and Myanmar saw no change. Analysts said the tariff reductions were influenced by both geopolitical considerations and reciprocal trade liberalisation. Experts highlighted that the timing, regional diplomacy, and transactional trade approach were central to the outcome, with Washington aiming to counter China’s influence in the region. Cambodian leaders publicly credited Trump’s intervention for averting industry collapse, while Thai officials emphasised the deal’s role in sustaining export competitiveness.

INDONESIA
Economy expands by 5.12% year-on-year in Q2 2025, surpassing expectations
(05 August 2025) Indonesia’s economy expanded by 5.12% year-on-year in Q2 2025, surpassing both the previous quarter’s 4.87% and Q2 2024’s 5.05%, and exceeding the 4.8% median forecast of 26 economists polled by Reuters. Growth was driven by a 10.67% surge in exports—mainly palm oil, iron and steel, electronic equipment and vehicles—attributed in part to frontloading ahead of anticipated U.S. tariffs, and an 11.65% rise in imports, largely of capital goods and raw materials. Government expenditure increased 30.37% due to infrastructure projects across regions. Household consumption grew 4.97%, supported by Eid-ul-Fitr-related spending, though concerns remain over declining purchasing power. Bank Indonesia cut its policy rate by 25 basis points to 5.25% in July, signalling potential further easing to support consumption amid slow retail sales growth. Analysts warned that U.S. tariff hikes, despite recent reductions from 32% to 19%, could negatively affect labour-intensive export sectors and employment. Indonesia’s shrinking middle class—down from 21.4% of the population in 2019 to 17.1% in 2024—is also seen as a constraint on domestic demand. Goldman Sachs revised its 2025 GDP forecast to 5.0%, expecting another 50 basis points in rate cuts by Q1 2026. Economists from Permata Bank and Panin Sekuritas project 2025 growth in the range of 4.7% to 5.1%, citing persistent global trade tensions and domestic inflation pressures.

THE PHILIPPINES
Economy grows by 5.5% year-on-year in Q2 2025, above forecast
(07 August 2025) The Philippine economy grew 5.5% year-on-year in Q2 2025, marginally above the 5.4% forecast in a Bloomberg survey, driven by a 14-year high in farm output and strong household consumption, which accounts for over 70% of GDP. Growth was supported by improved rice and corn harvests, easing inflation, and previous interest rate cuts, although industry, investment, and export growth slowed due to global trade uncertainty linked to US tariffs. The peso rose 0.3% to 57.33 against the dollar following the data release, while the stock index declined slightly. The Economic Planning Secretary attributed the performance to coordinated inflation management, and maintained the government’s revised 2025 GDP growth target of 5.5%-6.5%, down from the earlier 6%-8% goal. Achieving the lower end requires 5.6% growth in H2. The Governor of the Bangko Sentral ng Pilipinas signalled potential for two further 25bp rate cuts this year, with more easing possible in 2026. Bloomberg forecast a 25bp cut at the 28 August policy meeting, citing muted inflation and trade risks. US tariffs of 19% on Philippine goods, equal to regional peers, take effect later on 07 August, but officials downplayed their impact given the economy’s limited export reliance.

SINGAPORE
Singapore accounts for over 50% of ASEAN’s GSSSL bonds and loans in 2024
(07 August 2025) Singapore accounted for over 50% of ASEAN’s green, social, sustainability, and sustainability-linked (GSSSL) bonds and loans in 2024, according to the Monetary Authority of Singapore’s (MAS) sustainability report released on 09 July. GSSSL bond issuance volumes in Singapore rose nearly 80% to USD 13.3 billion in 2024, recovering from two years of decline but still below the 2021 peak of USD 14.4 billion, with green bonds increasing their share. Transition bonds remained a small but growing subset. GSSSL loans originated in Singapore reached over USD 48 billion, marking a seventh consecutive annual high, with sustainability-linked loans the dominant category since 2021. MAS supports sustainable financing through two grant schemes: the Sustainable Bond Grant Scheme and the Sustainable Loan Grant Scheme, both of which provide up to USD 125,000 to offset costs for external reviews or sustainability validation. Lower caps of USD 100,000 apply for issuers not aligned with recognised disclosure standards such as TCFD, ISSB, or ESRS. Bonds must have a minimum issuance or programme size of USD 200 million and at least one-year tenure, while qualifying loans must be at least USD 20 million in size and three years in tenure. Both schemes are valid through 2028 and allow multiple applications.

INDONESIA, UNITED STATES
Indonesian copper exports to the US to face zero percent import tariff
(07 August 2025) Indonesia’s Investment and Downstreaming Minister confirmed that Indonesian copper exports to the United States will face a zero percent import tariff, following trade negotiations under the Indonesia-US agreement concluded in July. Talks with the United States Trade Representative are ongoing to extend tariff reductions to other commodities, including nickel, palm oil, rubber, shorea wood, and copper derivatives. While nickel may not receive full exemption, Roeslani indicated that the current 19% tariff could be lowered further. The zero-tariff status is also being sought for commodities not produced in the US. The tariff on several Indonesian goods was previously reduced from 32% to 19% under a revision of the Trump-era trade measure. In return, Indonesia has pledged to purchase USD 15 billion in US energy products and USD 4.5 billion in US agricultural products, as announced by the US president on 16 July. Additionally, Indonesia plans to procure 50 Boeing aircraft, primarily Boeing 777 passenger jets, though specific buyers were not disclosed.

VIET NAM
Viet Nam’s exports rise 16% year-on-year in July 2025 to USD 42.3 billion
(06 August 2025) Viet Nam’s exports rose 16% year-on-year in July 2025 to USD 42.3 billion, exceeding the 14% forecast, as buyers accelerated purchases ahead of a 20% US import tariff effective 07 August. Imports increased 17.8% to USD 40 billion, surpassing the 15.2% forecast, resulting in a trade surplus of USD 2.27 billion, down from USD 2.83 billion in June. The tariff, originally proposed at 46%, was reduced to 20%, aligning closely with rates imposed on other Southeast Asian exporters. Net exports to the US constitute around 20% of Viet Nam’s GDP, raising concerns about tariff-related factory risks. The government confirmed ongoing trade negotiations with Washington and stated plans to diversify exports to the Middle East and India while promoting domestic consumption. Industrial production rose 8.5% year-on-year and 0.5% month-on-month, while consumer price inflation slowed to 3.19%, below both the June rate (3.57%) and market estimate (3.40%). Coffee exports increased 34.6% to 103,000 tonnes. Viet Nam’s GDP grew 7.96% in Q2 2025, with an official full-year target of 8%, though the impact of new US tariffs remains uncertain.

MALAYSIA, RUSSIA
Number of Malaysian tourists visiting Russia doubles in Q1 2025 year-on-year
(07 August 2025) Russia’s Economic Development Minister stated that the number of Malaysian tourists visiting Russia doubled in Q1 2025 compared to the same period in 2024. The announcement followed President Vladimir Putin’s meeting with Malaysia’s King, Sultan Ibrahim. The Russian Economic Development Ministry also reported that Russian tourist arrivals to Malaysia in 2024 exceeded pre-pandemic 2019 levels by 64%. In July 2025, the validity of Russia’s electronic visa was extended from 60 to 120 days, and the maximum stay increased from 16 to 30 days, with approximately 5,000 users to date. Malaysian citizens were the first to trial Russia’s new “tourist card” system, enabling remote top-ups for payments covering transport, accommodation, and other travel-related expenses.

RCEP Monitor

SOUTH KOREA, CHINA
South Korea announces temporary visa-free entry for Chinese tourist groups
(06 August 2025) South Korea announced a temporary visa-free entry programme for Chinese tourist groups from 29 September 2025 to June 2026 to stimulate inbound tourism and support domestic economic recovery ahead of the Asia-Pacific Economic Cooperation (APEC) summit. The measure follows China’s November decision to exempt South Koreans and others from visa requirements and precedes China’s October holiday period. The initiative was confirmed by South Korea’s tourism ministry after a policy meeting and coincides with improving bilateral relations under President Lee Jae Myung. The APEC summit, scheduled for 31 October to 1 November in Gyeongju, may also feature bilateral meetings involving Chinese President Xi Jinping and U.S. President Donald Trump. Following the visa-free announcement, shares of tourism-related South Korean firms rose sharply: Hyundai Department Store gained 7.1%, Hotel Shilla increased 4.8%, Paradise casino operator rose 2.9%, and Hankook Cosmetics surged 9.9%.

SOUTH KOREA
Finance Ministry to aid companies cope with increased US tariffs
(05 August 2025) South Korea’s Finance Ministry announced the formation of a task force to develop economic policy measures under President Lee Jae Myung’s administration, focusing on helping companies cope with increased US tariffs and expand into new markets. Following a trade agreement with the United States that set a 15% tariff on South Korean exports—above the 10% baseline and significantly higher than near-zero levels under the Korea-US FTA—the ministry plans short-term domestic demand stimulus and long-term financial support for technology development. The agreement, finalised shortly before President Trump’s 25% tariff deadline, leaves unresolved issues that may resurface during the upcoming summit between Trump and President Lee, including defence spending, corporate investments, non-tariff barriers, and currency concerns. The ministry emphasised that the agreement reduces trade uncertainty and includes a USD 350 billion investment package expected to open business opportunities, enhance bilateral economic cooperation, and stabilise supply chains. Policy initiatives will also target growth in artificial intelligence, semiconductors, and globally successful “K-contents” sectors, with strategies and budget plans to be announced later in August. Regulatory reforms are also planned to encourage business activity. Despite South Korea’s fastest quarterly growth in over a year, driven by consumer demand and tech exports, the IMF revised its 2025 GDP growth forecast for the country down to 0.8% from 1.0%, citing ongoing tariff-related trade risks.

JAPAN
Japan to encourage increased domestic cultivation of rice to meet production shortfalls
(05 August 2025) The Japanese government will announce a reversal of its longstanding rice production adjustment policy that curbs output, with Prime Minister Shigeru Ishiba set to confirm the shift toward encouraging increased rice cultivation at a ministerial meeting on 05 August. The change follows recent production shortfalls, including a 320,000-tonne deficit in 2024 and a cumulative shortfall of 980,000 tonnes from 2021–2024, which have driven up table rice prices and exposed weaknesses in the existing supply-demand balancing policy. The revised approach aims to boost rice output for both domestic use and export, ensure supply stability, and support farmers’ incomes, particularly through large-scale and corporate farming. Japan’s Agriculture Minister will present an analysis attributing price surges primarily to supply shortages rather than distribution issues. Current subsidies that incentivise shifts from table rice to feed rice or other crops like wheat and soybeans may be revised, along with a broader review of paddy and field policies scheduled for fiscal 2027. The Ministry of Agriculture will prepare an updated policy outline by summer 2026. Environmentally friendly initiatives such as “dry direct seeding” and terraced field maintenance will also be promoted in response to growing heat and water scarcity risks. Ishiba is expected to advocate for a flexible production support system, while addressing challenges related to abandoned farmland and intergenerational farm transfer.