By LUCIA MUTIKANI, JONATHAN CABLE AND LEIKA KIHARA
WASHINGTON/LONDON/TOKYO — – Worries over future US tariffs are clouding the outlook for factories across much of the United States, Asia and Europe, according to surveys released on Tuesday which nonetheless showed some were able to shrug off the uncertainty and keep growing.
Among the bright spots, Japan’s manufacturing read-out showed growth for the first time in 13 months, South Korea’s activity contracted at a milder pace and China’s Caixin PMI index also expanded in June – confounding an official survey that showed activity shrinking for a third straight month.
In Europe, Ireland, Spain and the Netherlands were among the star performers even as the wider euro zone read-out was broadly flat and Britain continued to contract, albeit more slowly.
Analysts said the underlying softness in surveys highlights the challenges facing businesses and policymakers as they try to navigate US President Donald Trump’s moves to shake up the global trade order with sweeping tariffs.
“We must recognise that the external environment remains severe and complex, with increasing uncertainties,” said Wang Zhe, economist at Caixin Insight Group. The Caixin/S&P Global survey showed Chinese manufacturing PMI rose to 50.4, surpassing expectations in a Reuters poll.
Japan’s final au Jibun Bank PMI rose to 50.1 due to an upswing in output, but overall demand remained weak as new orders shrank on concern over US tariffs.
Factory activity in South Korea contracted for the fifth straight month though the pace of decline eased on relief over a snap presidential election on June 3 that ended six months of uncertainty.
In manufacturing, India was a significant outlier in the region last month, as activity accelerated to a 14-month high, driven by a substantial rise in international sales that helped spark a record-breaking spurt in hiring.
That said, US activity contracted for a fourth straight month in June, the Institute for Supply Management reported, joining weak data on the housing market, consumer spending and swelling unemployment rolls that have suggested the economy’s underlying momentum slowed further in the second quarter even as gross domestic product probably rebounded as the drag from a record trade deficit faded due to falling imports.
Negotiators from major US trading partners are rushing to reach deals with Trump’s administration by a July 9 deadline to avoid import tariffs jumping to higher levels.
While China is continuing its negotiations for a broader trade deal with the US, Japan and South Korea have so far failed to win concessions on the tariffs imposed on their mainstay export items like automobiles. The 27-member European Union is embarking on new talks in Washington later this week.
