China
The main macro takeaway is that China is facing a more fragile external environment just as policymakers need steadier exports and calmer commodity prices. A new US trade investigation targeting manufacturing in China and the EU revives tariff uncertainty, while the Iran conflict is pushing geopolitical risk back to the center of global markets.
Washington’s move suggests the Trump administration is still looking for ways to restore tariff leverage after the Supreme Court struck down its previous tariff approach. Separate US sanctions on two firms and six individuals over funding for North Korean weapons reinforce a broader security-first policy backdrop around Asia.
At the same time, the Middle East story has shifted from isolated conflict to wider economic risk. Reports on a deadly US strike on an Iranian school, a US military refuelling plane crash in Iraq, and a Tehran resident’s account of life under attack all point to a conflict that is becoming costlier and harder to contain.
The clearest transmission channel for China is energy and shipping. With 6,000 Filipino sailors reportedly stranded by the Strait of Hormuz closure, and with US officials addressing possible drone spillovers while bunker demand rises, markets are being forced to price in higher risks to trade routes, insurance costs and oil supply.
SCMP’s weekly highlights also pointed to falling Chinese arms imports and a costly Hong Kong move to Dubai, small signs of a region adjusting to a less certain security environment. For China, that matters because renewed tariffs could weigh on exports, any sustained Hormuz disruption could lift imported inflation, and the mix is likely to keep policymakers cautious while investors demand a higher risk premium.