International News 02 October 2025
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Asian Manufacturing Struggles Amid Trade Pressures
Manufacturing activity across major Asian economies contracted in September 2025, reflecting slowing global demand, U.S. trade tariffs under President Trump, and persistent weakness in China. Private surveys showed that Japan’s PMI fell to 48.5, the fastest contraction in six months, while Taiwan’s dropped to 46.8, signaling a sharper downturn. Activity also declined in the Philippines and Malaysia. China, the region’s key growth engine, posted its sixth consecutive month of contraction, driven by weak domestic consumption and tariff pressures, highlighting the double burden of soft local demand and external headwinds. In contrast, South Korea stood out with PMI climbing to 50.7, its first expansion in eight months, supported by stronger overseas demand. However, Seoul’s export outlook hinges on pending negotiations with Washington to cut U.S. auto tariffs from 25% to 15%, in exchange for a $350 billion Korean investment in the U.S.. Economists warn that without a rebound in global demand, Asia’s manufacturing sector will likely remain under pressure, forcing regional central banks to maintain or expand monetary easing to support growth.
RBI Holds Repo Rate at 5.50% Amid Global Trade Uncertainty
The Reserve Bank of India (RBI) kept its benchmark repo rate unchanged at 5.50% on October 1, 2025, marking the fourth straight pause after cutting rates by a total of 100 basis points in the first half of the year. The six-member monetary policy panel voted unanimously to maintain a “neutral” stance, in line with market expectations. Governor Sanjay Malhotra noted that inflation remains under control, supported by falling food prices and recent tax cuts, while economic growth remains resilient. India’s annual inflation stood at 2.07% in August, still near the lower end of the RBI’s 2%–6% tolerance band. Despite GDP growth of 7.8% year-on-year in April–June, economists expect a slowdown in subsequent quarters due to U.S. tariffs of up to 50% on Indian imports. However, domestic demand could be boosted by tax reductions on consumer goods. Analysts believe the RBI still has room for future easing if growth weakens further, though the central bank currently prioritizes balancing inflation risks with economic stability.
U.S. Government Faces 15th Shutdown as Tariffs Take Effect
The United States officially entered its 15th government shutdown since 1981, and the second under President Donald Trump, after budget negotiations collapsed. More than 150,000 federal workers are set to leave payrolls this week through early retirement offers, marking the largest public-sector exodus in 80 years. Key services are being disrupted: the Federal Aviation Administration (FAA) is preparing to furlough a quarter of its staff, raising the risk of air travel delays. Despite the shutdown, Trump’s economic policies remain in force, with new tariffs on heavy trucks, patented drugs, and furniture taking effect as scheduled. Financial markets reflected mixed sentiment. U.S. equities edged lower, with S&P 500 and Nasdaq futures slipping 0.5% after a year-long rally, while gold surged to a record $3,875 per ounce as investors sought safe havens. Analysts note that shutdowns historically have had limited equity market impact, but the absence of official economic data — including nonfarm payrolls — is a concern. Instead, traders are turning to ADP private payrolls, ISM manufacturing, and eurozone inflation reports for direction. Asian markets traded mixed, while in Europe, stronger German inflation readings raised expectations the ECB may end its easing cycle, boosting the euro outlook.