Global Risk Indexes (11-02-2025)

Global 98 (0 —)
MENA 98 ( —)
APAC 98 ( —)
Europe 97 ( —)
Africa 97 ( —)
AMERs 98 ( —)
Markets 99 ( —)
Mei Ling, Asia Pacific region analyst at Worldwise Analytica

Mei Ling

Empowering minds, shaping decisions: Insights from the heart of geopolitics

Asia-Pacific Confronts Trade War Fallout, North Korea's Military Posturing, and Rising Political Volatility

The Asia-Pacific region is experiencing escalating trade conflicts, military tensions, and political instability, with multiple flashpoints developing simultaneously. Key economic and security developments indicate a fragile regional order vulnerable to sudden escalations.

U.S. Expands Trade War: Hong Kong Challenges Tariffs at WTO

Hong Kong has announced it will file a complaint with the World Trade Organization (WTO) against the new U.S. tariffs imposed on its exports. This move follows Washington's decision to end Hong Kong's special trade status, effectively treating it as part of mainland China. While Beijing has yet to formally respond, it is expected to leverage this case to challenge U.S. protectionism in global trade forums.

The Biden administration's policy reversal on postal tariffs'initially suspending, then reinstating and adjusting them'has added to market uncertainty, particularly for retailers and logistics firms dependent on Hong Kong's role as a global shipping hub. This dispute further complicates U.S.-China economic relations and raises concerns about retaliatory measures from Beijing.

North Korea's Military Threats Surge as U.S. Nuclear Submarine Arrives in Busan

Pyongyang has condemned the arrival of a U.S. fast-attack nuclear submarine in South Korea's Busan port, warning of 'grave consequences' and signaling its readiness to 'punish provokers.' This statement suggests an increased likelihood of military escalation in the Korean Peninsula. North Korea may conduct new missile tests in response, further straining regional security.

With South Korea's military strengthening its coordination with U.S. forces, tensions in the peninsula are approaching a critical threshold. Pyongyang's increased aggression follows a broader pattern of responding to Washington's military presence with displays of force, reinforcing concerns that diplomatic engagement is unlikely in the near term.

China's Pacific Expansion: Cook Islands Deepen Ties with Beijing

China's expanding influence in the Pacific continues, with the Cook Islands engaging in undisclosed agreements with Beijing. This development has triggered concern in New Zealand, which has traditionally provided economic and security assistance to the island nation. If China secures strategic access to Cook Islands' infrastructure, it could reshape Pacific power dynamics, weakening Western influence and providing Beijing with a greater foothold in the region.

India-U.S. Trade Talks Amid Washington's Protectionist Shift

Amid growing tensions over U.S. steel and aluminum tariffs, India is preparing a set of reciprocal trade measures. Prime Minister Modi's upcoming visit to Washington will focus on negotiating tariff reductions and securing energy supply deals to mitigate trade imbalances. Washington's protectionist policies continue to strain its relationship with key partners like India, forcing New Delhi to explore alternative economic alliances.

Philippines Political Crisis: Vice President Duterte Faces Impeachment

The Philippines is entering a period of acute political instability as Vice President Sara Duterte faces impeachment. The deepening rift between the Marcos and Duterte factions is turning the upcoming midterm elections into a decisive power struggle. With impeachment proceedings expected in June, political uncertainty could undermine Manila's ability to engage in long-term economic and security planning.

Vietnam's Rising Coal Imports Signal Continued Reliance on Fossil Fuels

Vietnam has emerged as a key driver of global coal demand, with imports surging 31% in 2024. Despite international efforts to promote clean energy, Vietnam's industrial expansion and power shortages have made coal the dominant energy source. This trend highlights the ongoing challenge of transitioning Southeast Asia's energy sector away from fossil fuels, complicating regional climate commitments.

Conclusion: A Region at Risk

The Asia-Pacific is facing a growing convergence of trade disputes, military threats, and political uncertainty. The escalation of the U.S.-China trade war, North Korea's aggressive posturing, and China's expanding influence in the Pacific are reshaping regional dynamics. Meanwhile, political crises in the Philippines and trade frictions between India and the U.S. add further instability. As these developments unfold, the potential for economic and security disruptions remains dangerously high.

Geopolitical Risk Assessment for the Asia Pacific
(11-02-2025)

The Asia-Pacific region remains in a state of heightened geopolitical and economic tension. The U.S.-China trade war is expanding, impacting Hong Kong, India, and Australia, with Washington implementing new tariffs while Beijing seeks diplomatic and economic countermeasures. The security situation in the Korean Peninsula continues to deteriorate, with North Korea escalating its military rhetoric in response to U.S. naval deployments. Meanwhile, Beijing's growing influence in the Pacific and internal disputes within South Korea and the Philippines signal increasing instability across multiple fronts. The risk of miscalculation and escalation'both economic and military'remains critically high.

Geopolitical Risk Index

Developments to Follow for the Asia Pacific (See All Global)

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