The most significant recent development has been October’s agreement between the US and China to postpone the imposition of reciprocal tariffs for a year. While the US has imposed heavy tariffs on India for continuing to buy Russian oil, it has also struck trade deals with Vietnam, Cambodia, Malaysia, Thailand, South Korea, Australia and Japan.

All of that leaves US tariffs significantly higher than they were at the start of the year. Geopolitics remain exceptionally fraught and it is still unclear how long the truce with China will hold. But we do have a little more certainty over trade arrangements, and this should allow countries, companies and investors to adapt.

In its latest APAC outlook, the International Monetary Fund (IMF) points to the resilience of the region, which is expected to remain the world’s fastest growing this year and next.

Some of this strength has come from companies ramping up exports ahead of expected tariffs. Nevertheless, the IMF now forecasts a YoY decline of just 0.1 percentage points in the region’s real economic growth in 2025, to 4.5%, before a further slowdown to 4.1% in 2026. These are healthier projections than those published in April.

Given recent strength in Chinese exports and the effects of Beijing’s stimulus measures, the IMF now expects China to grow faster than the broader region this year and next. The 2025 real GDP growth estimate for China is now 4.8%, down from 5.0% in 2024 but up from the IMF’s April estimate of 4.0%. For 2026, the IMF predicts that China’s real GDP will grow by 4.2%, compared with April’s estimated 4.0%. The decline reflects this year’s front-loading of orders to get ahead of tariffs.

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