The US Federal Reserve's latest Beige Book reveals a cooling economy amid rising trade tensions, with analysts warning of ripple effects across Asia's export-driven markets. The report, released Wednesday, notes 'modest' growth overall but highlights declining manufacturing activity and agricultural struggles linked to tariff disputes.
Business leaders cited 'heightened uncertainty' over trade policies as a key factor dampening investment. While consumer spending remains steady, supply chain disruptions—particularly in electronics and automotive sectors—are reshaping regional trade dynamics. Southeast Asian economies like Vietnam and Malaysia have seen increased foreign investment as companies diversify production bases away from the Chinese mainland.
For Asian investors, the Fed's cautious tone underscores the need to monitor US monetary policy shifts. 'When America sneezes, Asia still catches a cold,' said Singapore-based economist Dr. Li Wei. 'But this time, we're seeing more complex symptoms—from semiconductor shortages to shifting yuan exchange rates.'
The report comes as cross-strait trade between the Chinese mainland and Taiwan region reaches record levels, defying broader slowdown trends. Meanwhile, APEC members prepare for November's leaders' meeting, where US-China economic relations are expected to dominate discussions.
