Worries over future US tariffs are clouding the outlook for factories across much of Asia and Europe, according to surveys released yesterday which nonetheless showed some were able to shrug off the uncertainty and keep growing.
Among the bright spots, Japan’s manufacturing data showed growth for the first time in 13 months, South Korea’s activity contracted at a milder pace and China’s Caixin purchasing managers’ index (PMI) also expanded last month — confounding an official survey that showed activity shrinking for a third straight month.
In Europe, Ireland, Spain and the Netherlands were among the star performers, even as the wider eurozone data was broadly flat and the UK continued to contract, albeit more slowly.
Photo: Reuters
Analysts said the underlying softness in surveys highlights the challenges facing businesses and policymakers as they try to navigate US President Donald Trump’s moves to shake up the global trade order with sweeping tariffs.
The Caixin/S&P Global survey showed that the Chinese manufacturing PMI rose to 50.4, surpassing expectations in a Reuters poll.
Japan’s final au Jibun Bank PMI rose to 50.1 due to an upswing in output, but overall demand remained weak as new orders shrank on concerns over US tariffs.
Factory activity in South Korea contracted for the fifth straight month, although the pace of decline eased on relief over a snap presidential election on June 3 that ended six months of uncertainty.
In manufacturing, India was a significant outlier in the region last month, as activity accelerated to a 14-month high, driven by a substantial rise in international sales that helped spark a record-breaking spurt in hiring.
Negotiators from major US trading partners are rushing to reach deals with Trump’s administration by a Wednesday next week deadline to avoid import tariffs jumping to higher levels.
While China is continuing its negotiations for a broader trade deal with the US, Japan and South Korea have so far failed to win concessions on the tariffs imposed on their mainstay export items such as automobiles.
The 27-member EU is embarking on new talks in Washington later this week.
The eurozone HCOB manufacturing PMI, compiled by S&P Global, edged up to 49.5 last month from 49.4 in May, its highest level since August 2022, but still below the 50 mark denoting growth in activity.
Moreover, national surveys revealed stark differences across the EU. Ireland recorded the highest PMI at a 37-month peak of 53.7, while Greece, Spain and the Netherlands also posted readings above 50.
While Germany’s manufacturing PMI reached its highest in nearly three years, it still indicated contraction. France, Italy and Austria on the other hand registered faster declines in manufacturing conditions.
In the UK, the manufacturing sector showed some signs of turning a corner in its long slump.
“That said, any hoped for stabilization remains fragile, and subject to potential headwinds that could severely impact demand, supply chain reliability and future growth prospects,” S&P Global Market Intelligence director Rob Dobson said.
CHIP RACE: Three years of overbroad export controls drove foreign competitors to pursue their own AI chips, and ‘cost US taxpayers billions of dollars,’ Nvidia said China has figured out the US strategy for allowing it to buy Nvidia Corp’s H200s and is rejecting the artificial intelligence (AI) chip in favor of domestically developed semiconductors, White House AI adviser David Sacks said, citing news reports. US President Donald Trump on Monday said that he would allow shipments of Nvidia’s H200 chips to China, part of an administration effort backed by Sacks to challenge Chinese tech champions such as Huawei Technologies Co (華為) by bringing US competition to their home market. On Friday, Sacks signaled that he was uncertain about whether that approach would work. “They’re rejecting our chips,” Sacks
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
NATIONAL SECURITY: Intel’s testing of ACM tools despite US government control ‘highlights egregious gaps in US technology protection policies,’ a former official said Chipmaker Intel Corp has tested chipmaking tools this year from a toolmaker with deep roots in China and two overseas units that were targeted by US sanctions, according to two sources with direct knowledge of the matter. Intel, which fended off calls for its CEO’s resignation from US President Donald Trump in August over his alleged ties to China, got the tools from ACM Research Inc, a Fremont, California-based producer of chipmaking equipment. Two of ACM’s units, based in Shanghai and South Korea, were among a number of firms barred last year from receiving US technology over claims they have
BARRIERS: Gudeng’s chairman said it was unlikely that the US could replicate Taiwan’s science parks in Arizona, given its strict immigration policies and cultural differences Gudeng Precision Industrial Co (家登), which supplies wafer pods to the world’s major semiconductor firms, yesterday said it is in no rush to set up production in the US due to high costs. The company supplies its customers through a warehouse in Arizona jointly operated by TSS Holdings Ltd (德鑫控股), a joint holding of Gudeng and 17 Taiwanese firms in the semiconductor supply chain, including specialty plastic compounds producer Nytex Composites Co (耐特) and automated material handling system supplier Symtek Automation Asia Co (迅得). While the company has long been exploring the feasibility of setting up production in the US to address
RSS