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Asia is reeling but is anyone winning?

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Osmond Chia

Business reporter, BBC News

Getty Images US President Donald Trump during a dinner with Benjamin Netanyahu, Israel's prime minister, not pictured, in the Blue Room of the White House in Washington, DC, US, on Monday, 7 July, 2025.Getty Images

President Trump has extended the deadline for tariff negotiations – again

“Deeply regrettable” is how Japanese Prime Minister Shigeru Ishiba has described US President Donald Trump’s latest tariff threat – a 25% levy on Japanese goods.

Tokyo, a long-time US ally, has been trying hard to avoid exactly this. It has been seeking concessions for its beleaguered car makers, while resisting pressure to open its markets to American rice.

There have been many rounds of negotiations. Japan’s trade minister has visited Washington DC at least seven times since April, when Trump announced sweeping tariffs against friends and foes.

And yet, those trips seem to have borne little fruit. Trump’s label for Tokyo moved from “tough” to “spoiled” as talks dragged on.

And then this week, Japan joined a list of 22 nations that were sent tariff letters – 14 of those are in Asia. From South Korea to Sri Lanka, many are export-driven manufacturing hubs.

They have until 1 August to strike a deal with the US. But they are likely wondering about their chances given that Japan, a staunch ally that has been openly pursuing a deal, is still facing a steep levy.

Trump has reset the tariffs clock – again. So who is winning, and who is losing?

Winner: Negotiators who want more time

In one sense, almost all of the countries targeted by Trump earlier this year benefit from the deadline extension – they now have more than three weeks more to strike deals.

“The optimistic case is that there is pressure now to engage in further negotiations before the 1 August deadline,” said Suan Teck Kin, head of research at United Overseas Bank.

Growing economies like Thailand and Malaysia, which received tariff letters this week, will be especially eager to seek a solution. They are also caught in the middle of US-China tensions as Washington targets Chinese exports rerouted through third countries, what are known as transhipped goods.

Economists have told the BBC that further extensions are likely, given the complexity of trade agreements.

Countries will need time to implement Trump’s demands, which, going by the letters, are not entirely clear, said business lecturer Alex Capri from the National University of Singapore.

For instance, transhipped goods have been specifically levied as part of Vietnam’s trade deal with the US. But it is unclear whether that applies to finished goods, or to all imported components.

Either way, it will involve far more sophisticated technology to keep track of supply chains, Mr Capri said.

“It’s going to be a slow, long-term and evolving process involving many third parties, tech companies and logistic partners.”

Loser: Asian manufacturers

It seems clear that tariffs are here to stay, which makes global trade the loser.

Companies from the US, Europe and China with global businesses remain at risk, Mr Capri said. This hurts not just exporters, but also US importers and consumers.

And it is a blow for the economic ambitions of large parts of Asia, whose rise has been fuelled by manufacturing, from electronics to textiles.

Getty Images Garment workers, men and women, walk out in a large group from their factory during their lunch break in Phnom Penh on July 8, 2025.Getty Images

Cambodia’s garment workers rely on an export-driven industry for their livelihood

It is unwise to make zero-sum observations on which countries are winning and losing, Mr Capri added, because international trade, especially between US and China is so deeply inter-linked.

Some countries, however, could lose more than others.

Vietnam was the first in Asia to strike a deal, but it has little leverage against Washington, and is now facing levies up to 40%. The same goes for Cambodia. A poor country heavily reliant on exports, it has been negotiating a deal as Trump threatens 35% tariffs.

South Korea and Japan, on the other hand, may be able to hold out longer, because they are richer and have stronger geo-political levers.

India, which too has leverage of its own, has not been issued a letter yet. A deal has seemed imminent but appears to be delayed by key sticking points, including access to the Indian agricultural market and the country’s import rules.

Loser: US-Japan alliance

“Despite its close economic and military relationship with the US, Japan is being treated the same as other Asian trade partners,” said economist Jesper Koll.

And that could transform the relationship, especially as Tokyo, with its large financial reserves, appears to be ready for the long game.

“Japan has proven to be a tough negotiator and I think that has annoyed Trump,” Mr Koll said.

Despite a rice shortage that has sent prices soaring, PM Ishiba has refused to buy US rice, choosing instead to protect domestic farmers. His government has also refused to give in to US demands to increase its military spending.

Getty Images This photo taken on April 8, 2025 shows a man in a cap walking past the logo of Samsung Electronics on a billboard in Vietnam's Bac Ninh province.Getty Images

Global businesses like Samsung are in limbo because of Trump’s tariffs

“They are well prepared,” Mr Koll argued. He said the day after Trump announced tariffs in April, Tokyo declared an economic emergency and set up hundreds of consultation centres to assist affected companies.

“Japan will be seeking a deal that is credible,” he said, because what’s the guarantee Trump won’t change his mind again?

With Japan’s upper-house election due this month, it would be surprising if a deal is agreed by August, Mr Koll said.

“No-one is happy. But is this something that is going to force a recession in Japan? No.”

Winner: US or China?

Asia has long been seen as a key battleground between Washington and Beijing, and analysts say, because of tariffs, Trump may be ceding ground.

For one, given how complex these deals can be, Trump may be overplaying his hand by extending the deadline again, according to some observers.

“The bargaining position of the US has actually been diminished as they have revealed that their hand isn’t actually as strong as they would like,” said NUS economics professor David Jacks.

And the deals that are made could come at the cost of reshaping trade and ties built over decades.

Trump’s choice of posting the letters online, rather than through traditional diplomatic channels, could backfire, said Mr Capri, who described it as “political theatre”.

The confusion caused is a “great gift” to China, which is trying to portray itself as a stable alternative to Trump’s unpredictability, he added.

But the US market is not easy to replace – and Beijing has its fair share of tensions with countries in this part of the world, from Vietnam to Japan.

China is in the middle of its own trade negotiations the US, although it has longer to strike a full agreement – until 13 August.

So who will win more friends in this trade war is hard to say, but the race is still on.

“Both parties see the need for a divorce,” Prof Jacks said, “but getting there will be tough and involve proceedings which will span years, if not decades.”



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Why AI alone can’t guarantee business success, expert cautions

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As companies around the world race to adopt artificial intelligence (AI), strategy expert Shotunde Taiwo urges business leaders to look beyond the hype and focus on aligning technology with clear strategic goals.

Taiwo, a finance and strategy professional, cautions that while AI offers transformative potential, it is not a guaranteed path to success. Without a coherent strategy, organisations risk misdirecting resources, entrenching inefficiencies, and failing to deliver meaningful value from their AI investments.

“AI cannot substitute for strategic clarity,” she explains, stressing the importance of purposeful direction before deploying advanced digital tools. Business leaders, she says, must first define their objectives, only then can AI act as an effective enabler rather than an expensive distraction.

Taiwo stated that many organisations are investing heavily in AI labs, data infrastructure, and talent acquisition without clearly defined business outcomes. This approach, she notes, risks undermining the very efficiencies these technologies are meant to create.

For example, a retail business lacking a distinctive value proposition cannot expect a recommendation engine to deliver meaningful differentiation. Similarly, manufacturers without well-structured pricing strategies will find limited benefit in predictive analytics. “AI amplifies what’s already there,” she adds. “It rewards businesses with strong foundations and exposes those without.”

According to Taiwo, the true value of AI emerges when it is guided by intelligent, strategic intent. High-performing organisations use AI to solve well-defined problems aligned with commercial goals, often framed by business analysts or strategic leaders who understand both operational realities and broader business priorities.

She cites Amazon’s recommendation engine and UPS’s route optimisation algorithms as models of effective AI deployment. In both cases, technology served a clear purpose: boosting customer retention and streamlining logistics, respectively. When guided by strategy, AI becomes a force multiplier, enhancing forecasting, enabling automation, and improving personalisation where workflows are already well-defined.


On the other hand, even the most advanced AI systems falter in the absence of sound strategy. Common pitfalls include deploying machine learning models without a business case, focusing on tools rather than problems, collecting data without a clear use, and optimising narrow metrics at the expense of enterprise-wide goals. These missteps often result in underwhelming pilots and disillusioned stakeholders, issues strategic professionals are well-equipped to navigate and avoid.

In this sense, AI adoption can serve as a strategic diagnostic. Taiwo suggests that when business leaders struggle to define impactful AI use cases, it often reflects deeper ambiguity in their organisational direction. Key questions, such as where value is created, who the primary customer is, or which decisions would benefit most from improved speed or accuracy, are not technical, but fundamentally strategic.

AI, she says, acts as a mirror, revealing strengths and weaknesses in how a business is positioned, differentiated, and aligned across functions. Strategic leaders and business analysts are uniquely positioned to interpret these insights, inform course corrections, and guide effective technology investments.

Looking ahead, Taiwo argues that strategy in the AI era must be data-literate, agile, ethically grounded, and above all, human-centred. Leaders must understand what data they have, and how it can be harnessed, without needing to become technologists themselves.

Organisations must be nimble enough to act on AI-driven insights, whether through supply chain reconfiguration or dynamic pricing. Ethics, too, are critical, especially as AI increasingly impacts areas such as hiring, lending, and content moderation. “AI is not a replacement for strategy – it is a reflection of it,” she said.

In organisations with clarity and discipline, AI can unlock significant value. In those without, it risks adding cost and complexity. The responsibility for today’s leaders is to ensure that technology serves the business, not the other way around.



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No imminent change to tax-free allowance

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There will be no immediate changes to cash Individual Savings Accounts (Isas), the BBC understands.

Chancellor Rachel Reeves was widely expected to announce plans to reduce the £20,000 tax-free allowance.

The move was aimed at encouraging more investment in stocks and shares, which the goverment says it will still focus on.

“Our ambition is to ensure people’s hard-earned savings are delivering the best returns and driving more investment into the UK economy,” a Treasury spokesperson said.

The Treasury is expected to continue to talk to banks, building societies and investment firms about options for reform.

An Isa is a savings or investment product that is treated differently for tax purposes.

Any returns you make from an Isa are tax-free, but there is a limit to how much money you can put in each year.

The current £20,000 annual allowance can be used in one account or spread across multiple Isa products as you wish.



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UK economy shrank unexpectedly in May

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The economy shrank by 0.1%, the second month in a row it has contracted.



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