Investment Rating - The report does not explicitly provide an investment rating for the industry Core Viewpoints - The report emphasizes that trade tensions are escalating as deadlines for agreements approach, leading to increased uncertainty that may impact business confidence, capital expenditure, and trade cycles [1][7][32] Summary by Sections Trade Negotiation Updates - The report outlines the current status of trade negotiations across various economies in the region, highlighting that only Vietnam has reached an agreement so far, while others remain uncertain [7][9] - Key issues include tariff adjustments, market access for agricultural products, and the complexities surrounding the approval of exports, particularly for critical materials like rare earths [9][48] Tariff Implications - The report indicates that the U.S. may unilaterally set tariff rates, with potential increases in tariffs on pharmaceuticals and semiconductors, reflecting ongoing trade uncertainties [7][12][21] - Current tariff rates on imports from Asia, excluding China and Vietnam, have seen a significant rise, with the weighted average tariff rate increasing [12][14] Economic Impact - High-frequency data suggests that the growth cycle may be adversely affected in the next 2-3 months due to the ongoing trade tensions, with indicators showing signs of a slowdown in economic activity [32][41] - The report notes that while some economic indicators have remained strong, there is a concern that this may be due to preemptive demand ahead of the July 9 deadline, with subsequent data expected to reflect a downturn [32][42] Regional Trade Dynamics - The report highlights that countries like India, Indonesia, and Thailand are facing significant tariff increases, which could further complicate trade relations with the U.S. [25][48] - The complexities of defining and measuring transshipment issues are also discussed, indicating that imports perceived as transshipped from China may face higher tariffs, complicating trade for other Asian economies [21][31] Future Outlook - The report concludes that trade uncertainties are likely to persist, affecting corporate confidence and capital spending, with potential tactical tariff increases expected if negotiations stall [7][22][32]