Indonesia Cuts Oil Imports from Singapore to Zero in Strategic Pivot Toward U.S. Ahead of Tariff Talks

Economic

Summary:

Indonesia, Southeast Asia’s largest economy, is preparing to halt fuel imports from Singapore, redirecting purchases to the U.S. and Middle East as part of a calculated geopolitical...

Strategic Realignment Amid Shifting Global Trade Tensions

Indonesia announced it will gradually eliminate imports of refined petroleum products from Singapore—its largest fuel supplier—and source oil instead from the United States and Middle Eastern countries. This decision, confirmed by Energy Minister Bahlil Lahadalia on May 9, reflects Jakarta's dual motivations: securing more competitive prices and rebalancing trade relationships in light of intensifying geopolitical volatility.

Singapore, despite lacking domestic crude oil production, has long served as a regional refining hub. It currently supplies over 50% of Indonesia’s refined fuel imports, totaling approximately 290,000 barrels per day, largely consisting of gasoline and diesel. However, this dependency is set to end.

Political Calculus Behind Energy Diversification

Minister Lahadalia made it clear that the shift is not solely economic. “It’s not just about price,” he stated. “It’s also about geopolitical balance—we need to adjust our position with other global powers.” His remarks suggest Indonesia is strategically pivoting toward the U.S. in a bid to gain favor before entering potentially high-stakes trade negotiations, especially under the looming threat of punitive tariffs from the Trump administration.

The move follows a broader trend across the Global South, where nations are seeking to diversify trade partnerships to reduce reliance on traditional suppliers and preempt the fallout of escalating U.S. protectionism. Jakarta has already proposed increasing imports of U.S. crude oil and liquefied petroleum gas (LPG), signaling clear intent to deepen energy ties with Washington.

Operational Shifts and Market Disruption Risks

Indonesia's state oil firm Pertamina is currently investing in new port infrastructure to accommodate larger crude carriers, facilitating direct imports from distant suppliers. According to Sentosa Shipbrokers, this transition could begin within the next six months and may significantly disrupt regional tanker traffic and trade flows, given Singapore's central role in maritime fuel logistics.

Sentosa’s analysts predict volatility in tanker chartering rates and regional supply chains if Singapore’s export volumes contract sharply. The restructuring of Indonesia’s import profile will also test the operational agility of refineries in the U.S. and Gulf states, which may see a short-term spike in demand.

Implications for Singapore and Regional Energy Flows

For Singapore, the decision signals a potential decline in its long-standing role as a fuel re-export hub in Southeast Asia. While the city-state's advanced refining infrastructure remains world-class, its vulnerability to geopolitical shifts and competitive sourcing strategies is becoming increasingly apparent.

Indonesia’s decision is emblematic of a broader recalibration happening across Asia-Pacific supply chains. From energy to agriculture, countries are no longer viewing proximity or historic trade patterns as sufficient, instead factoring in diplomatic alignment and trade security in a more fragmented global order.

By aligning its energy procurement strategy with broader geopolitical objectives, Indonesia is signaling its readiness to play a more sophisticated game in global trade diplomacy. As tariff threats loom, the country is leveraging its import portfolio not only to reduce vulnerability but to gain strategic leverage with Washington.

Source: Reuters

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Economic

U.S.–Vietnam Agricultural Trade: A Critical Economic Pillar

On May 9, the Vietnamese Ministry of Industry and Trade and the Ministry of Agriculture and Environment co-hosted a high-level conference focused on fostering trade in agricultural, forestry, and aquatic products with the United States. This comes at a sensitive time, as the U.S. contemplates imposing retaliatory tariffs of up to 46% on certain imports, placing significant pressure on Vietnamese exports.

The United States remains Vietnam’s largest export market for agricultural, forestry, and aquatic products, with bilateral trade in these sectors reaching $13.8 billion in 2024—accounting for over 21% of the country’s total agri-export turnover. China followed closely at $13.6 billion. The strategic nature of this trade partnership underscores the urgency with which Vietnam is seeking collaborative solutions.

Balancing Immediate Needs with Long-Term Strategy

Minister of Agriculture and Environment Đỗ Đức Duy emphasized that the Vietnamese government has been proactive, engaging in consultations and negotiations with the U.S. to safeguard mutual interests. Meanwhile, Minister of Industry and Trade Nguyễn Hồng Diên stressed the dual benefits of increasing U.S. agricultural imports—not only to satisfy domestic demand and ease trade tensions in the short term but also to build a foundation for deeper, more technologically advanced, and sustainable bilateral cooperation.

The Minister urged the removal of trade barriers and the implementation of strong, practical policies—such as tax incentives, credit support, and logistics facilitation—to energize two-way trade and support the private sector.

Business Engagement and Policy Synergy

The conference further highlighted the role of industry stakeholders. Minister Diên called on Vietnamese businesses and industry associations to proactively engage with American partners, not only to secure new sourcing contracts but also to explore collaboration opportunities for building a green, high-value, and sustainable agricultural system in Vietnam.

Through enhanced production standards, circular agriculture models, and advanced processing technologies, Vietnam aims to align its agricultural sector more closely with global expectations—especially from high-standard markets like the U.S.

Administrative Simplification and Technical Barrier Reform

Vietnam is also accelerating efforts to dismantle technical trade barriers. The ministries committed to simplifying customs procedures and opening access for U.S. agricultural goods. The intention is to reduce transaction costs and enhance business confidence, ensuring that companies on both sides can maintain and expand operations under a more predictable and supportive policy framework.

The risk of escalating tariffs underscores a broader transformation in global trade dynamics, and Vietnam views its relationship with the United States as a stabilizing force. The government's commitment to policy reform, combined with industry readiness and cross-sectoral cooperation, signals that Vietnam is not only responding to immediate threats but also positioning itself as a reliable, forward-looking trading partner.

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China–U.S. Trade War

Economic

A Wake-Up Call for European Maritime Security

Chinese companies—namely COSCO, China Merchants, and Hong Kong-based Hutchison—currently hold stakes in over 30 port terminals across the European Union. While these investments were once viewed through a commercial lens, they are now being reinterpreted as strategic vulnerabilities in light of shifting global dynamics and geopolitical tensions.

On May 8, EU Transport Commissioner Apostolos Tzitzikostas called for a comprehensive review of foreign ownership in European seaports, urging leaders to consider new regulations to bolster strategic infrastructure oversight. His remarks follow the publication of a new EU defense white paper proposing tighter restrictions on foreign ownership of transportation assets considered critical to security.

Though no country was explicitly named, the subtext was clear—concerns are mounting over China’s state-coordinated economic influence.

Strategic Penetration in Key Ports Across Europe

Chinese port investments extend from Belgium’s Antwerp-Bruges to Greece’s Piraeus, with holdings in Rotterdam, Valencia, and Gdynia. According to Belgian defense scholar Simon Van Hoeymissen, these are not isolated cases of capital investment but rather a deliberate strategy by Beijing to secure long-term maritime access.

Portuguese MEP Ana Miguel Pedro from the European People’s Party underscored the risks: “These are not market-driven actors. COSCO, for instance, follows directives from the Chinese Communist Party.” Her warning, shared increasingly by EU policymakers, is that deep Chinese involvement in seaport operations poses both economic and security threats.

Case in Point: Poland’s Gdynia Port

The port of Gdynia in Poland encapsulates the strategic dilemma. Operated in part by Hutchison for over 20 years, it lies adjacent to naval bases, shipyards, and NATO special forces hubs. The presence of a Chinese operator in such proximity to EU and NATO military logistics has triggered new layers of concern.

Poland has since classified Gdynia as critical infrastructure, requiring its operators to work closely with national security authorities. Hutchison had been in talks to sell its global port portfolio—worth $23 billion, including 14 European terminals—to a BlackRock-MSC consortium. However, the deal was halted in March following political pushback from Beijing.

EU's Growing Strategic Awareness

A recent report by Poland’s Center for Eastern Studies (OSW) linked China’s ambiguous support for Russia in the Ukraine conflict to increased fears over port security. The EU is now reconsidering not just future Chinese investments but also existing ownership structures.

Calls for regulatory reform are growing louder within the European Parliament. A draft resolution from the Socialists and Democrats (S&D) group calls for stricter foreign investment screenings as part of the next legislative cycle. The overarching message: Europe can no longer afford fragmented responses while foreign actors pursue coordinated, long-term strategies.

Geopolitics Meets Infrastructure: A Critical Inflection Point

The shift in EU attitudes reflects a broader recognition that maritime infrastructure is no longer just about commerce—it’s about sovereignty and strategic leverage. As MEP Pedro warned, “If a vulnerability is exploited in one European port, the whole EU is at risk.”

With rising geopolitical uncertainty and global power rivalries intensifying, Europe is being urged to act not just reactively, but preemptively. The question now is whether the EU can reform fast enough to safeguard its critical infrastructure before those vulnerabilities become liabilities.

Source: Politico

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Damon

Economic

A total of seven vessels which left China after the announcement of the 145%-plus tariffs are currently at the nation's two busiest ports for container traffic from Asia, according to vessel arrivals tracked and aggregated by MarineTraffic. An additional five freight ships are expected to arrive in the coming days.

Amazon, Home Depot, Ikea, Ralph Lauren and Tractor Supply are among the companies with Chinese goods in these containers, spanning a wide range of consumer items.

In addition to housewares, apparel, and furniture, Amazon imported a wide variety of products on behalf of sellers, including refrigerators, deep fryers, mousepads, bookshelves and living room sofas.

Tractor Supply shipments include portable drum fans, garden tools, and men's work boots.

Lamps and ceiling fans have been processed through Customs for Home Depot.

A Tractor Supply spokesperson referred CNBC to its recent earnings call on April 24 when the company pointed to "notable uncertainty" as a results of the tariffs. "Tractor Supply is actively working with its vendor and supply chain partners to navigate the impact of recently announced tariffs, while also monitoring the broader macroeconomic factors impacting its customers," the spokesperson said.

Ikea furniture; Speedo swim goggles and swim caps; Procter & Gamble tissue holders; Samsung printed circuit boards, microwaves and refrigerator parts; Ralph Lauren sweaters, cashmere, and blazers; Dr. Martens Airwair footwear; Samsung microwaves and refrigerator parts; LG washing machines, air conditioners, ranges, refrigerators and dishwashers; Bauer Hockey sporting goods; Lenovo computer parts; auto parts for Valeo North America; and headsets and computer keyboards for Polaris, were all among the Chinese container goods.

For many of the companies, products categories deemed as essential to replenish are brought in despite concerns about consumer demand and an economic slowdown.

Amazon said in a statement sent by email that it is working with its "broad, varied range of valued selling partners in our store to support them in adapting to the evolving environment while maintaining broad selection and low prices for customers."

Home Depot is in a quiet period ahead of announcing its quarterly results, and referred CNBC to an existing statement citing "a fluid environment."

"We, together with our vendors, are monitoring developments and will work closely to manage with the goal of being our customers' advocate for value," a Home Depot spokesperson said.

Chinese freight container traffic decline

Trump suggested on Friday ahead of key trade talks that he was willing to lower tariffs on China to 80%, a rate many businesses would likely still consider to be extremely high.

"80% Tariff on China seems right! Up to Scott B," Trump said in a Truth Social post, referring to a planned meeting between Treasury Secretary Scott Bessent and counterparts from China in Switzerland this weekend.

Brian Bourke, global chief commercial officer at SEKO Logistics, tells CNBC clients continue to struggle in understanding how all of the various tariff provisions are stacked, or in some cases cancel each other out.

"This confusion has led them to continually alter and update their scenario planning, freezing any other decisions for the business they would be making," said Bourke. "Many of our clients priced and sold their products or projects prior to the tariff amounts being announced, and with the speed and severity as well as the quantity of new tariff provisions being announced, they are not able to change the pricing on items that have already sold and are arriving in May and June, or beyond."

The number of freight vessels and shipping containers headed to the U.S. from China has plummeted since the tariffs announcement in early April.

Across the Asia-North America West Coast and Asia-North America East Coast trades, there was a total of 90 blank sailings across April and May, according to Sea-Intelligence. The Ocean Alliance (a freight consortium including Chinese-owned and operated COSCO and OOCL, Taiwan-based Evergreen, and French-owned CMA) accounted for 48 of those canceled sailings.

Bookings are down from 30% to 50%, according to logistics providers and ocean carriers.

In addition to decreased vessel sailings as a result of paused manufacturing orders from shippers and fewer container to fill, ocean carriers are using smaller vessels to move trade. MSC, the largest ocean carrier in the world, along with the Gemini Alliance (comprised of Maersk and Hapag Lloyd), are among the freight companies using smaller vessels between the Asia-North America West Coast routes.

MSC has reduced its container capacity by 28% year over year, according to Sea-Intelligence data analyzing the impact of canceled sailings and vessel changes, while Ocean Alliance container capacity is down by 26% year over year.

Bourke said once shippers have finished bringing in what they consider essential stocks, they are in various degrees of "wait-and-see" mode with their supply chains, and continuing to cancel orders from China, which has led to widespread fears about product shortages and the potential for empty shelves. "What happens when safety stocks that had been built up disappear?" Bourke said.

Source: CNBC

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China–U.S. Trade War

Container Shipping Routes Severely Affected

Major shipping companies such as MSC, ZIM, Cosco, and OOCL have suspended at least six weekly container routes between China and the U.S. since April 2025. These routes typically transport over 25,600 forty-foot containers per week, amounting to more than 1.3 million annually. The cargo includes consumer goods, automotive parts, and industrial inputs essential to U.S. manufacturing.

Simon Sundboell, CEO of Danish maritime data firm eeSea, noted that this isn’t just a warning sign—it’s proof of real-time economic contraction. According to Drewry, capacity between Asia and the U.S. West Coast dropped by 20% in April and another 12% in early May. The U.S. East Coast was similarly affected, with capacity down 22% in April and 18% in May.

MSC, the world’s largest container shipping firm, canceled 30% of its scheduled trans-Pacific voyages in April. Meanwhile, Premier Alliance (ONE, HMM, Yang Ming) reported a 20% blank sailing rate in May. Even Maersk and Hapag-Lloyd, while maintaining operations, have downsized vessels due to declining demand.

WTO Warns of Up to 80% Collapse in U.S.–China Trade

WTO Director-General Ngozi Okonjo-Iweala issued a stark warning: escalating tariffs could cut U.S.–China bilateral trade by as much as 80%. She emphasized that the trade war not only threatens both economies but also jeopardizes the global trading system and overall economic recovery.

Shipping analyst John McCown echoed the concern, predicting that U.S. container imports could plunge by 25% or more by July 2025 due to the prolonged impact of Trump's tariffs.

UNCTAD: Investment Paralysis and Risks to Vulnerable Economies

UNCTAD Secretary-General Rebeca Grynspan warned that retaliatory tariffs between the world’s two largest economies have caused a “paralysis” in global investment decision-making. She stressed that frequent policy changes and economic unpredictability make it nearly impossible for businesses and governments to plan ahead.

Ironically, the countries most harmed by this trade war are not the ones responsible for the U.S. trade deficit. Least developed countries (LDCs) and small island developing states, which account for just 1.6% and 0.4% of the U.S. trade gap respectively, are disproportionately affected by global trade disruptions and declining investor confidence.

These economies now face an escalating triple threat: external volatility, unsustainable debt, and slowing domestic growth.

Call for Cooperative Reform, Not Escalation

UNCTAD concluded that while global trade reform is necessary, it must come through predictable, inclusive, and development-oriented dialogue—not unilateral tariff escalation. Existing trade rules must evolve to address 21st-century challenges, but without abandoning the principle of protecting the most vulnerable.

“Now is the time for cooperation, not confrontation,” said Grynspan, urging global leaders to prioritize dialogue and fairness over disruption.

Source: UNCTAD

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Political

President Donald Trump on May 8 urged Russia and Ukraine to enter into a 30-day unconditional cease-fire while U.S.-led peace negotiations are ongoing.

Trump stated that the temporary cease-fire must “ultimately build toward a peace agreement” between the two nations and warned that the United States would impose sanctions if the cease-fire wasn’t respected.

“Talks with Russia/Ukraine continue,” he stated in a Truth Social post.

“Hopefully, an acceptable ceasefire will be observed, and both countries will be held accountable for respecting the sanctity of these direct negotiations.”

Trump also said that he would “stay committed” to ending the war in Ukraine, despite his administration officials having previously indicated that the United States may abandon mediation efforts if there are no clear signs of progress toward a peace agreement.

“It can all be done very quickly, and I will be available on a moment’s notice if my services are needed,” the president stated.

“Thousands of young soldiers are dying on a weekly basis, and everybody should want it to STOP. I do, and the United States of America does, also.”

Ukrainian President Volodymyr Zelenskyy told Trump during a May 8 phone call that Ukraine is ready to enter into a temporary cease-fire with Russia and is willing to “engage in talks in any format.”

However, Zelenskyy said that Russia must first demonstrate its readiness to end the war, “starting with a full, unconditional ceasefire.” This would involve ending missile and drone strikes and halting offensive assaults along the front lines.

“Ukraine is ready for a full ceasefire starting right now, from this very moment—a 30-day silence. But it must be real,” he said in a video address.

“Thirty days that could become the beginning of years of peace.”

On April 30, the Kremlin said that Russian President Vladimir Putin remains open to a cease-fire and eventual peaceful settlement to the conflict, but there are still issues need to be resolved.

Secretary of State Marco Rubio has previously warned that the U.S. government may abandon efforts to mediate an end to the three-year-long war if Russia and Ukraine fail to make a peace agreement.

“I think they’re closer in general than they’ve been any time in the last three years but it’s still not there,” Rubio said in an interview with NBC News on April 27.

Rubio said that the United States may opt to take measures against those resisting efforts to end the war, but emphasized that it would “prefer not to get to that stage yet because we think it closes the door to diplomacy.”

The war in Ukraine has been ongoing since Putin sent thousands of troops for a full invasion in February 2022. Putin declared an “Easter truce” with Ukraine on April 19, directing his forces to halt all military operations until midnight of April 20.

Both sides later accused each other of violating the truce. The Russian military eventually resumed the “special military operation” after the truce ended.

On April 28, Putin unilaterally declared a three-day ceasefire from May 8–May 10 to mark the 80th anniversary of victory over Nazi Germany in World War II. Zelenskyy later dismissed the move as yet “another attempt at manipulation” by Russia.

“The cease-fire should not be just for a few days, only to return to killing afterward,” Zelenskyy said in an April 28 address.

“It must be immediate, full, and unconditional, for at least 30 days, to ensure it is secure and guaranteed. This is the foundation that could lead to real diplomacy.”

Ukrainian Foreign Minister Andriy Sybiha alleged that Russia violated the three-day cease-fire 734 times between midnight and midday on May 8, including 464 attacks involving heavy weapons and 176 drone strikes.

The Russian Defense Ministry said that Ukraine, in turn, had carried out 488 attacks on Russian targets and twice tried to break through the border in the Kursk region.

Source: Zero Hedge

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Economic

Symbolic Breakthrough Amid Global Trade Tensions

On May 8, 2025, President Trump announced what he described as a “landmark trade agreement” with the United Kingdom, emphasizing expanded U.S. access to British markets for agricultural products like beef and ethanol. Framed as the first major deal since the April 2 global tariff hike—dubbed "Liberation Day"—the pact is being positioned as a diplomatic success that aligns with the 80th anniversary of the end of World War II.

U.K. Prime Minister Keir Starmer also welcomed the deal, calling it "historic" and highlighting its potential to protect thousands of British jobs. However, despite the celebratory tone, the agreement’s long-term economic and strategic weight remains open to debate.

Tariff Adjustments and Limited Concessions

While the U.K. avoided the sweeping retaliatory tariffs imposed on other partners, it still faces a 10% base tariff and selective 25% tariffs on cars, aluminum, and steel. Under the new agreement, the 25% automotive tariff will be reduced to 10% for the first 100,000 British-made vehicles annually—a provision Trump described as a rare exception meant for luxury brands like Rolls-Royce and Bentley.

In return, the U.K. agreed to lower non-tariff barriers and open its markets to an estimated $5 billion worth of U.S. goods, including beef, ethanol, and machinery. British airline plans to purchase $10 billion in Boeing aircraft were also cited as evidence of deepening trade ties.

Still, U.S. Commerce Secretary Howard Lutnick clarified that the 10% base tariff remains the new floor for future negotiations, implying that other countries may face higher rates unless exceptional circumstances apply.

Economic Impact: Symbolic Win, Modest Reality

Despite the diplomatic triumph, economists and political analysts are more reserved in their assessments. The U.K. ranks only ninth among U.S. trade partners, accounting for around 3% of bilateral trade volume. As economist Justin Wolfers of the University of Michigan told CNN, “This isn’t a big trade deal,” noting that the headline numbers don’t reflect transformative economic changes.

In the Senate, Minority Leader Chuck Schumer echoed this skepticism, warning that the agreement could be “built on shifting sands.” He expressed concern that Trump’s erratic approach to tariffs undermines the credibility and durability of any deal.

Moreover, the absence of full transparency regarding the agreement’s provisions has prompted further scrutiny. Investors and trade observers worry that without a clear framework, the deal could be easily reversed or revised under shifting political winds.

Strategic Timing and Political Messaging

Trump’s announcement comes amid mounting pressure to stabilize global trade, especially as the blanket 10% tariff and retaliatory hikes have begun to rattle markets. Treasury Secretary Scott Bessent revealed that similar deals with up to 18 other trade partners are under negotiation, with more announcements expected within days.

Talks with China remain the most consequential, and they have only recently been scheduled. Bessent and U.S. Trade Representative Jamieson Greer arrived in Switzerland on May 8 to meet with top Chinese economic officials—underscoring the urgency of re-engagement with Beijing.

The U.S.–U.K. trade agreement represents a politically useful signal amid growing global uncertainty, but its real-world impact remains limited. While it may offer temporary relief to select sectors, the underlying fragility of Trump's tariff-driven trade strategy raises serious doubts about long-term consistency and economic gains. Without a more comprehensive and reciprocal framework, the deal risks being more symbolic than structural in the broader context of U.S. trade policy realignment.