Asia Communique
Trump Slaps Tariffs on Japan, PH | Indonesia Hit Hard by China Shift | U.S. Army Tests Anti-Ship Missile in Australia
This is today’s edition of Asia Communique.
Trump Expands Tariff Campaign with Deals Targeting Japan and the Philippines
U.S. President Donald Trump on Tuesday unleashed another round of tariff-driven trade diplomacy, announcing back-to-back deals with Japan and the Philippines after separate meetings with high-level delegations at the White House. The twin announcements mark the most aggressive move in Trump's second-term trade agenda—and could reshape regional trade alignments just months ahead of the U.S. election season.
Japan: 15% Tariff, $550B Investment Pledge
In a Truth Social post, Trump said the U.S. and Japan had finalized a trade deal that will:
Impose a 15% tariff on all Japanese imports to the U.S.
Bring $550 billion in Japanese investments into U.S. industries
Expand access for U.S. agricultural products, including cars, trucks, and rice
Despite the sweeping scope, the deal does not address the existing 25% tariff on Japanese cars—a major source of tension between the two economies. Japanese officials have yet to confirm any elements of the deal. Trump met with Japan's chief negotiator Ryosei Akazawa, but there was no joint statement or policy framework released.
“This is a very exciting time for the United States of America,” Trump wrote, calling Japan “a great friend.”
Philippines: 19% Tariff, “Open Market” Deal After Marcos Visit
In a separate meeting, Trump hosted Philippine President Ferdinand Marcos Jr., concluding what he described as a “beautiful visit” with a bold trade proclamation:
The Philippines will pay a 19% tariff on all goods exported to the U.S.
U.S. goods will face zero tariffs in the Philippines under the new “Open Market” arrangement
The two sides also agreed to enhance military cooperation, though no specifics were provided
“The Philippines is going OPEN MARKET with the United States, and ZERO Tariffs. The Philippines will pay a 19% Tariff,” Trump wrote on social media, calling Marcos “a very good and tough negotiator.”
The 19% figure aligns with new tariffs levied on Indonesia, and comes just under the 20% imposed on Vietnam, part of Trump’s broader Indo-Pacific tariff strategy. Trump said the deal would grow “very big numbers,” referencing the $5 billion U.S. trade deficit with the Philippines in 2024.
No confirmation has been issued by the Philippine government. Marcos, who described the U.S. as the Philippines' “closest and most reliable ally,” did not comment after the Oval Office announcement.
Context: New Tariffs Rolling in by August 1
Trump’s moves are part of a global tariff overhaul launched in April, which imposed a universal 10% base tariff on most imports. Several countries, including the EU, Canada, and China, face escalating duties starting August 1, with trade talks in limbo.
"At the end of the day, I don’t think the Philippine government is sweating the final number," said Gregory Poling of CSIS, "so long as it keeps Philippine-made goods competitive."
Protesters gathered near the White House during Marcos’ visit, urging him to address concerns of Filipino American communities and migrant workers affected by U.S. immigration enforcement.
Corporate and Market Reactions
General Motors reported $1 billion in losses over the last quarter due to tariffs
Stellantis (maker of Jeep) said tariffs cost the company €300 million ($349 million)
Japanese markets dipped, while Southeast Asian governments remain cautious amid unclear terms
Next Up: Trump hinted at a possible state visit to China, framing the Philippines' tilt away from Beijing as a diplomatic win:
“The country was maybe tilting toward China, but we un-tilted it very, very quickly,” he said.
China’s Coal Imports Collapse in June—Indonesia Takes the Hit
China’s coal imports plunged 26% year-on-year in June to just 33 million tons—the lowest monthly total since February 2023—as domestic oversupply and a shift toward cleaner energy cut into foreign purchases. Indonesia, China’s top coal supplier, saw shipments fall a staggering 30%, hit hardest by Beijing’s pivot away from low-grade lignite.
Even as summer electricity demand surged, the decline in thermal coal imports signals a structural change. Steelmaking coal imports were relatively stable, which means the drop in coal used for power generation was even steeper than headline figures suggest.
Imports are likely to remain on a downtrend as Chinese power plants prioritize long-term contracts with domestic miners. The fall in imports is also being driven by accelerating adoption of renewables and slowing industrial demand.
Breakdown of June Year-on-Year Coal Imports:
Indonesia: –30%
Russia: –17%
Australia: –24%
Mongolia: –15%
Canada: +9%
China’s ramp-up in domestic coal output has pushed prices to four-year lows, making even higher-quality domestic coal cheaper than Indonesian lignite. This has created new challenges for Indonesian exporters, who are already facing uncertainty due to proposed export levies in Jakarta that could further reduce competitiveness.
Meanwhile, regulators in Beijing have warned coal producers to stay within production limits, signaling a possible crackdown on oversupply.
Steel Sector Snapshot:
Coking coal imports were down 7.7% year-on-year, but up 23% from May
Canadian and Mongolian suppliers gained ground as Australian shipments were hit by weather
Steel demand rose 4.3% in the first half of 2025, lifted by auto and machinery sectors
However, efforts to reduce steelmaking capacity may weigh on long-term demand for coal and iron ore
China’s dramatic pullback from imported coal—particularly from Indonesia—underscores its evolving energy strategy and the growing challenges for regional suppliers tied to fossil fuel exports. The shift is structural, not seasonal.
Pacific First: U.S. Army Fires Anti-Ship Missile From Land During Talisman Sabre
The U.S. Army has carried out a first-of-its-kind missile strike from land against a maritime target in the Pacific, using the Typhon launcher system to fire an SM-6 anti-ship missile during the ongoing Talisman Sabre 2025 military exercise in Australia.
The missile successfully struck a target 166 kilometers offshore, launched from the Bradshaw Field Training Area in Australia’s Northern Territory—marking a milestone in the U.S. Army’s efforts to field land-based maritime strike options in the Indo-Pacific.
“It’s easier to see a ship at sea than it is a launcher platform in the jungles of Indonesia or the Philippines,” said Lt. Gen. JB Vowell, deputy commander of U.S. Army Pacific.
What Is Talisman Sabre?
Talisman Sabre is a biennial, multinational exercise led by Australia and the United States, aimed at enhancing interoperability and combat readiness across land, air, and maritime domains. This year’s edition features more than 35,000 troops from over a dozen countries, including Japan, South Korea, the UK, and the Philippines. The 2025 exercise puts particular emphasis on littoral warfare, long-range strike, and joint operations in archipelagic terrain—a clear nod to potential scenarios in the Taiwan Strait or South China Sea.
Why the Typhon Test Matters
The Typhon launcher is part of the Army’s Mid-Range Capability (MRC) program, designed to fill the strike gap between the Precision Strike Missile (PrSM) and hypersonic weapons. It’s capable of launching Tomahawk cruise missiles and SM-6s, giving Army forces a way to hold enemy ships at risk from concealed land positions far from the coast.
During the exercise:
Soldiers loaded and launched the 21-foot-long SM-6
The Army tested its encrypted digital command systems
Commanders observed the strike in real time from Fort Shafter in Hawaii
Vowell noted the Army is also exploring lighter, smarter munitions for Typhon, such as:
Miniaturized hypersonic missiles
Modified GMLRS rounds from HIMARS with anti-ship capability
Semi-autonomous guidance systems for better maritime tracking
“We’re still trying to get to a better form-factor solution,” Vowell said. “The Typhon is informing us.”
Strategic Implication:
The land-based maritime strike capability demonstrated at Talisman Sabre signals the U.S. Army’s increasing role in Indo-Pacific deterrence. It also provides allies like Australia and Japan with a blueprint for integrating long-range precision fires into joint operations.