Hello from Tokyo. The trade war between the two global superpowers, which has polarized the world since the start of the year, is escalating once again. On Thursday last week, China's Ministry of Commerce declared it would broaden export controls on rare-earth elements and associated technologies. In response, U.S. President Donald Trump said the next day that a 100% additional tariff would be levied on Chinese goods beginning in November.
Recent communications between Washington and Beijing appear to have become increasingly chaotic. In mid-September, Trump and Chinese President Xi Jinping spoke by phone and reached an agreement on the potential sale of TikTok's U.S. operations. The two sides are in talks to hold a summit, but uncertainty now clouds its prospects. Depending on how the latest round of the U.S.-China trade war unfolds, it could have a significant impact not only on Asia but also on the whole global economy.
Meanwhile, as the historic sparring between the U.S. and China intensifies, some countries are beginning to benefit from the fallout. A de facto Chinese ban on American beef is boosting Australian cattle farmers and exporters. According to the latest figures from Australia's government, beef exports surged by 35% in the first seven months of the year, reaching 10 billion Australian dollars ($6.6 billion). Shipments to China rose by 65%, while exports to the U.S. increased by 48%.
Across Asia, especially in Southeast Asia, many countries have built close ties with both China and America. How will the tensions between the two superpowers affect the economies and businesses of these nations, and who might emerge as hidden winners? Check out Nikkei Asia's latest reports.
Before I wrap up, I'd like to invite you to join "The Great Dialogue," a special symposium in Tokyo on Oct. 22. The event will open with a conversation between the chief economics commentator at the Financial Times, Martin Wolf, and former Bank of Japan Gov. Haruhiko Kuroda. In the second half, Hiroshi Yamazaki and Roula Khalaf, editors-in-chief of Nikkei and the FT, respectively, will discuss the role of journalism in the age of AI. You can watch the event live for free here.
My suggested reads
1. Parents and students around Asia are struggling to come to terms with Donald Trump's drastic overhaul of U.S. education and immigration policy since America has long been the region's top international destination for higher learning. This is particularly true of elite South Korean families, many of whom have been enrolling their kids in international schools in a special zone of Jeju Island to prepare for college abroad.
2. Indonesia's art scene has boomed for several years as younger people start buying paintings and other works. Businesses such as banks and trading platforms also see benefits from sponsoring events like this month's Art Jakarta fair, which attracted almost 40,000 visitors. But the country's recent economic jitters are putting a brake on spending, leaving future growth in limbo.
3. While global money is still drawn to U.S. shares, uncertainties arising from President Trump's erratic trade policy and other moves have encouraged a growing number of institutional investors to seek places to deploy their capital. Asian bourses and financial authorities hope to grab a slice of the pie by putting market reforms in place. According to our reporters across the region, these range from Thailand making more securities eligible for short-selling to India easing documentation and compliance requirements for qualified investors.
Wishing you a wonderful weekend!
Akito Tanaka
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