Asia Communique
Trump’s Tariff Blow Hits India | Modi to Visit China Amid Strain | Anduril Drones Land in Taiwan | Asia Eyes Growth, Braces for Risk | India, PH Seal Strategic Ties | Tibetan Cut from China’s Gaokao
Hello Readers,
This week marks a pivotal moment in Asia’s geopolitical landscape — and Asia Communique is here to help you navigate it.
One thing is increasingly clear: China is no longer the sole focus of U.S. Indo-Pacific strategy. Former President Donald Trump has signaled a shift, prioritizing an end to the war in Ukraine even if it means slapping tariffs on India, a longtime strategic partner. The calculus is changing — fast.
Trump hits India with steep tariffs
Image: REUTERS
U.S. President Donald Trump signed an executive order imposing an additional 25 % tariff on Indian goods, raising duties on some products to 50 %, after accusing India of buying Russian oil. The duties, which take effect 21 days after the announcement, could hit about US$87 billion worth of Indian exports and are among the highest ever levied by the United States. Analysts warned the move could produce the most serious downturn in U.S.–India relations since Trump’s return to office; sectors such as textiles, gems and jewellery stand to lose competitiveness against rivals like Vietnam. New Delhi called the decision “extremely unfortunate” and said its Russian oil purchases were driven by market factors and the energy needs of 1.4 billion people. Officials indicated that India has no immediate plans to retaliate but may provide relief to exporters to mitigate the impact.
Modi will travel to China amid tensions
Indian Prime Minister Narendra Modi is scheduled to visit China on 31 August for a Shanghai Cooperation Organization summit in Tianjin. It will be his first visit to China in more than seven years and comes against a backdrop of escalating frictions with Washington following Trump’s tariff hike. Modi and Chinese President Xi Jinping spoke recently at a BRICS meeting in Russia; analysts see the upcoming trip as part of a diplomatic recalibration as India seeks to diversify its partnerships. New Delhi did not comment publicly on the visit.
Philippine President Ferdinand “Bongbong” Marcos Jr. has concluded a high-profile five-day state visit to India, solidifying what both sides called a new “Strategic Partnership” — one that brings defense, economic, and maritime cooperation to the center of bilateral ties.
Key Announcements
1. Bilateral Ties Elevated to Strategic Partnership
In a formal meeting at Hyderabad House, President Marcos and Indian Prime Minister Narendra Modi announced the elevation of their relationship to a Strategic Partnership, promising expanded cooperation across trade, defense, maritime security, digital technology, space, and people-to-people exchanges.
2. BrahMos Missile Expansion in the Works
President Marcos confirmed the Philippines is in talks with India to acquire additional BrahMos supersonic cruise missiles, following the first delivery in 2024 under a $375 million deal. Philippine troops operating the system have reported high confidence in its performance, citing extensive joint training and simulation drills.
“We are in the process of actually procuring more,” Marcos said, noting the system’s reliability and effectiveness.
The president emphasized that these acquisitions are part of the AFP’s modernization efforts, not preparations for war. Instead, they are a response to rising tensions in the West Philippine Sea and a way to ensure the country’s territorial defense.
“We are simply reacting to the challenges that we are facing... the tensions have increased in the past years. We have to do it. This is our duty — to defend the country,” he said.
3. First Joint Naval Drill in the South China Sea
In a strong show of strategic alignment, Indian and Philippine naval vessels conducted their first joint sail in the South China Sea during Marcos’s visit. The drill took place inside the Philippines’ Exclusive Economic Zone and was reportedly shadowed by Chinese vessels — a frequent occurrence in the contested waters.
Marcos revealed that four Indian naval vessels were in the region during his departure, including one research ship docked in the Philippines and three conducting coordinated drills with the Philippine Navy.
4. New Defense Tech on the Horizon
Marcos praised India’s fast-growing defense industry as “second to none,” hinting that future acquisitions beyond BrahMos are under active review. He stressed that interoperability and shared training with India were critical to the Philippines’ broader military modernization.
“Everything is on the table right now,” he noted.
5. Travel and People-to-People Boosts
India and the Philippines also announced visa-free entry for Indian tourists to the Philippines, and free e‑visas for Filipino travelers to India. Direct flights between Delhi and Manila will resume in October — a move expected to significantly boost tourism and business ties.
Strategic Outlook
Marcos’s remarks — paired with the flurry of defense, economic, and diplomatic announcements — suggest that India is rapidly becoming one of the Philippines’ key security partners outside of its traditional alliance with the United States. The ongoing BrahMos expansion, joint naval exercises, and shared concern over China's maritime assertiveness have given new urgency to this emerging Indo-Pacific axis.
As Marcos put it plainly: “We are not girding up for war… but we must be ready.”
Regional business and economic news
South Korea & China: Seoul announced a temporary visa‑waiver program for Chinese tour groups. From 29 Sep 2025 through 30 Jun 2026, Chinese visitors traveling with an organized tour will be able to enter South Korea through any airport or seaport without a visa—an expansion beyond the previous Jeju‑Island‑only visa waiver. Officials expect the measure to boost tourism and local economies; Chinese travelers already numbered 2.5 million arrivals in the first half of this year. Beijing recently offered South Koreans visa‑free entry for visits of up to 15 days, signalling thawing ties.
China: Beijing extended its investigation into imported beef for three more months, postponing the decision deadline to 26 November. The probe, launched last December amid a domestic supply glut, is not directed at specific countries and gives exporters like Argentina, Australia and Brazil more time before potential trade restrictions. China’s commerce ministry said it extended the probe because of the case’s complexity and pledged to maintain a “healthy and stable” trade environment.
South Korea: South Korea’s current account surplus surged to US$14.27 billion in June, the largest monthly surplus since records began in 1980, as strong exports of semiconductors and computer devices boosted the goods surplus to US$13.16 billion.
Thailand: The Joint Standing Committee on Commerce, Industry and Banking raised Thailand’s 2025 GDP growth forecast to 1.8 %–2.2 %, citing improved prospects after the United States reduced tariffs on Thai imports to 19 %. Exports—which account for 18.3 % of Thai trade—are now expected to grow 2 %–3 % this year. The committee cautioned that weak tourism, a strong baht, and a border dispute with Cambodia remain headwinds.
Singapore: United Overseas Bank (UOB), Southeast Asia’s third‑largest lender, reported a 6 % year‑over‑year drop in second‑quarter net profit to S$1.34 billion, missing analysts’ expectations. The decline was mainly due to lower net interest income.
Technology & trade: Shares of SK Hynix fell after Trump announced plans for a 100 % tariff on imported semiconductors, but South Korea’s trade envoy later clarified that companies manufacturing or planning to manufacture chips in the United States—such as SK Hynix and Samsung—would be exempt.
Taiwan: Taiwan’s defense ministry announced that the first batch of Altius‑600M attack drones from U.S. firm Anduril Industries had been delivered to its army. Defense Minister Wellington Koo said the drones can be launched from land, air or sea vehicles, hover for hours and carry high‑explosive anti‑tank missiles; he thanked Anduril founder Palmer Luckey for quickly enhancing Taiwan’s defensive and offensive capabilities. Anduril separately said it will open a Taiwan office and sell AI‑powered attack drones, arguing that ensuring Taiwan can defend itself with asymmetric, combat‑effective capabilities is critical for regional stability; the company plans to partner with local entities and tap the island’s engineering talent while Taiwan works to expand its domestic drone industry.
Trump Threatens 100% Tariff on Foreign-Made Chips — TSMC, Nvidia Likely Spared
In a move that could jolt the global semiconductor supply chain, former U.S. President Donald Trump announced plans to impose a 100% tariff on semiconductor imports from countries that do not manufacture chips on American soil — a dramatic escalation in his protectionist push aimed at onshoring critical tech infrastructure.
Speaking from the Oval Office on Wednesday, Trump said the tariff would apply to “all chips and semiconductors coming into the United States,” unless the supplying companies are already manufacturing in the U.S. or actively building facilities. He warned that firms failing to follow through on domestic commitments would be hit retroactively with the full tariff.
“If… you say you're building and you don't build, then we go back and we add it up… and we charge you at a later date,” Trump told reporters.
While the announcement lacked formal policy details, it sparked immediate speculation across the tech and trade sectors. Analysts say the proposal, if enacted, would likely hit Chinese chipmakers such as SMIC and Huawei, but spare Taiwan’s TSMC — thanks to its Arizona facility — and big U.S. buyers like Nvidia, which are heavily reliant on TSMC’s fabs.
“There’s so much serious investment in the United States in chip production that much of the sector will be exempt,” said Martin Chorzempa of the Peterson Institute.
Industry observers believe the move could further isolate Chinese semiconductor players, as chips from SMIC and Huawei — even when embedded in consumer electronics — would still face import duties unless assembled in exempt countries.
The tariff threat follows bipartisan U.S. efforts to rebuild domestic chipmaking. Under Biden’s CHIPS Act, $52.7 billion has been earmarked to bring advanced manufacturing back home. As of 2024, the U.S. accounted for just 12% of global chip output, a steep decline from 40% in 1990.
Trump’s remarks also appear to target “fabless freeloaders” — companies that design chips in the U.S. but depend on foreign manufacturing. "Survival of the biggest," quipped Brian Jacobsen of Annex Wealth Management, noting that only cash-rich firms can afford new U.S. fabs.
Global implications: While China is the clearest target, other major chipmaking countries ae not off the hook. However, South Korea, Japan, and the EU have already secured favorable trade terms with Washington. The EU, for example, negotiated a flat 15% tariff on exports like chips, cars, and pharma. Seoul and Tokyo say the U.S. promised not to treat them worse than others — likely insulating Samsung, SK Hynix, and Renesas from the 100% hike.
China Drops Tibetan from Core Gaokao Subjects
In a move that has sparked alarm among Tibetan rights advocates and education experts, China will remove the Tibetan language as a core subject in the 2026 national college entrance exam (gaokao) for most students in the Tibet Autonomous Region.
Under the new policy, only students enrolled in specialized programs—such as Tibetan literature or traditional Tibetan medicine—will continue to take Tibetan as part of their exams. For the majority of students, the subject will no longer count toward college admissions.
Official Line vs. Local Concerns
Beijing claims the reform is intended to standardize education across the country and enhance competitiveness in key subjects like Mandarin, math, and English. But critics say the change strips Tibetan of its functional value, further discouraging students from studying their native language.
Though Tibetan will still be taught in schools, its exclusion from one of China’s most consequential exams effectively downgrades the language to a cultural afterthought.
What This Means for Tibet
Teachers may face job uncertainty or reassignment as demand for Tibetan instruction declines.
Students will lose incentives to study their native language, especially those aiming for top-tier universities.
Tibetan identity could erode further, as language plays a central role in cultural continuity.
This decision mirrors similar policies in regions like Inner Mongolia and Xinjiang, where local languages have been systematically sidelined in favor of Mandarin. For many Tibetans, it is yet another sign that language—and by extension, culture—is being quietly erased from public life.
As China tightens its grip on ethnic minority regions, language remains one of the most sensitive battlegrounds. This latest move sends a clear message: assimilation, not accommodation, is the path forward.