Malaysia to Discuss Sectoral Tariffs, Including Semiconductors, with U.S. at ASEAN Summit

Economic

Summary:

Malaysia will engage in talks with U.S. Secretary of Commerce Howard Lutnick at the upcoming ASEAN summit to discuss sectoral tariffs, particularly on semiconductors...

Malaysia is set to hold important discussions with the U.S. Secretary of Commerce Howard Lutnick at the upcoming ASEAN Leaders Summit, scheduled from October 26 to 28, 2025. These talks will focus on sectoral tariffs, including the controversial issue of tariffs on semiconductor exports, following the imposition of a 19% tariff on Malaysian exports by the U.S. government earlier this year. The meeting comes at a critical time for Malaysia, which is a major player in the global semiconductor market.

U.S. Tariffs and Semiconductor Exemptions

In August 2025, the Trump administration imposed a 19% tariff on Malaysian exports to the U.S., although semiconductor chips were temporarily exempt from this levy while a national security investigation is ongoing. Despite the exemptions, President Trump proposed a 100% tariff on imported semiconductor chips in August, a move that would severely affect Malaysia’s semiconductor sector, which is the sixth-largest exporter of chips globally.

While the proposed tariff would not apply to U.S.-based companies or those with manufacturing plans in the U.S., Malaysia has expressed concerns that removing the exemption on its semiconductor exports could undermine its competitive edge and disrupt global supply chains. Malaysia’s Trade Minister, Tengku Zafrul Aziz, has stressed the importance of these discussions to secure a favorable outcome for the country’s semiconductor industry and its broader trade relationships with the U.S.

Tariff Negotiations at the ASEAN Summit

During the ASEAN Leaders Summit, Minister Tengku Zafrul will discuss the finalization of tariff agreements with Secretary Lutnick. Malaysia is hopeful that the agreement will benefit sectors like agriculture, industry, and manufacturing, which are vital to the country’s trade and investment with the U.S. Additionally, the agreement is expected to support Malaysia’s competitiveness and address the tariff challenges posed by the U.S. tariffs.

Several other ASEAN countries are also anticipated to sign trade agreements with the U.S. during the summit, though specific details have not been disclosed. The outcome of these negotiations will have significant implications for Malaysia’s economic relations with the U.S. and the broader Southeast Asian region.

As the U.S. continues to adjust its trade policies, Malaysia is working to secure a favorable tariff agreement that supports its semiconductor sector and broader economic interests. The discussions at the ASEAN summit are crucial for Malaysia, as the country seeks to protect its position as a leading global semiconductor exporter and ensure stable trade relations with the U.S. The resolution of these tariff issues will shape Malaysia's trade strategy and its economic future in the years to come.

Source: Reuters

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James Whitman

Political

Less than a year ago, Yuichiro Tamaki was fighting to retain the leadership of his own opposition party amid reports of an extramarital affair. Now, the 56-year-old athletics fan is in the running to lead the nation, with the identity of the next administration largely in his grasp.

The collapse of the ruling coalition last week has catapulted Tamaki into a position where he could become prime minister with the support of three opposition parties including his Democratic Party for the People. That’s a potential outcome that seemed like wishful thinking just days ago as the ruling party’s new leader Sanae Takaichi was getting lauded as Japan’s first female prime minister-in-waiting.

Tamaki is due to meet the leaders from the Constitutional Democratic Party and the Japan Innovation Party later Wednesday. The three opposition party leaders will assess the scope for cooperation around a single candidate to field against Takaichi in an upcoming parliamentary vote to decide the prime minister.

The DPP leader is in pole position to be that alternative. The three parties’ combined 210 seats in the lower house mean he would be on track to win that vote if the LDP can’t find any additional votes following the loss of its coalition partner Komeito. Whoever becomes prime minister will then form the next government.

“I would like to make Japan a country full of hope once again,” Tamaki said Tuesday as talks between the opposition parties continued. “Currently, young people and the working generations have little hope, or rather, they have no hope at all, and I believe that it is my important role as a politician to change this.”

Tamaki is a former Finance Ministry official who wants a higher tax-free income allowance, a lower sales tax and slower Bank of Japan interest rate hikes. The popularity of Tamaki and his party has mushroomed over the past year or so as his strategy of focusing on increasing take-home pay resonated with voters of working age.

His party, alongside the far-right Sanseito, are the rising newcomers in Japan’s political realm. They are political parties that are appealing to under 50s disillusioned by the failure of LDP’s efforts to address their concerns over the rising cost of living, the growing welfare burden of an aging society and, in the case of Sanseito voters, the influx of foreigners.

While both parties gained seats in the July upper house election, it’s the more powerful lower house that will ultimately decide who becomes premier, and there the DPP has 28 seats compared with Sanseito’s three.

Tamaki already leveraged his party’s presence in the lower house to broker a deal with the LDP last year over raising the tax-free income threshold to ¥1.6 million ($10,500) with an intention to eventually reach ¥1.78 million. Despite the Finance Ministry saying the measure could cost up to ¥8 trillion in lost revenue if applied across the board, the minority ruling coalition at the time had to stomach the demand to ensure the passage of budgets. Now Tamaki can go even further by replacing the LDP altogether.

The DPP’s expansionary fiscal stance and caution on monetary policy normalization suggest that a Tamaki premiership would keep the yen in a weak position and put a greater burden on the nation’s finances if the extra economic growth the party promises doesn’t materialize.

In the July election, the DPP called for the lowering of the sales tax to 5% for all goods until real wages rise in a sustained manner, removing gasoline taxes and renewable energy charges on electricity bills. These measures aimed to boost households’ purchasing power.

As part of its “future-orientated active financing,” the party said it would issue ¥5 trillion of “education bonds” each year to help support child rearing. The party said it would look for a diverse range of funding options including turning some of the BOJ’s holdings of government debt into perpetual bonds.

To bring about a unified candidacy, the DPP and the CDP would have to overcome their differences on defense and nuclear power. Tamaki wants the CDP to become more open to restarting shuttered nuclear plants and to align on security issues. Tamaki’s DPP supports the defense build-up initiated by the LDP and the right to counter-strike threats.

Likely recalling the instability of a 1993 opposition coalition that briefly ousted the LDP but quickly squabbled on policy, Tamaki is insisting that the parties must start on the same page.

The talks could easily break down, ending Tamaki’s chances and likely clearing the way for Takaichi to become prime minister. An alternative scenario is that the LDP offer concessions to Tamaki’s party including a cabinet position in return for ad-hoc support on policies and a Takaichi premiership.

Still, that’s an outcome that likely looks far less attractive to a politician with a shot at leading the nation.

Tamaki is from Kagawa on Japan’s fourth-largest island, Shikoku. The island is famous for its udon noodles, pilgrimage routes and the Awa-odori dance festival. Tamaki, who was a keen decathlete as a student, has made playful reference to his need to run, cycle and lift weights to balance his appetite for those noodles. He plays piano and guitar to satisfy his creative muse.

His elite trajectory saw him pass through the University of Tokyo, the Finance Ministry and Harvard Kennedy School. He joined the ministry in 1993, the same year the dominant LDP lost power for the first time since its formation.

On the wall in his office is a framed replica of calligraphy by Masayoshi Ohira, an LDP heavyweight from his home prefecture who was prime minister from 1978 to 1980. Its six characters mean: When you keep calm, heaven and earth will open up.

While the LDP may still hope to win Tamaki over to its side in 2025, following their policy collaboration the previous year, the current decision he faces isn’t the first time he has needed to choose between the LDP and the opposition. When he opted for a career in politics in 2005, Tamaki was offered party candidacies by both the LDP and its opposition rival, the Democratic Party of Japan.

At that time he selected the DPJ, but he failed to win the Kagawa seat at his first try. He was successful second time around when the party ousted the LDP in 2009 in a historic election landslide. By the time the LDP had wrestled back power in late 2012, Tamaki had already reached the position of DPJ deputy secretary-general.

Like other former members of the DPJ, Tamaki has progressed through an array of splinter parties since then, until taking the full reins of the DPP in 2020. A coalition with the CDP and Ishin would reunite him with some of those senior DPJ leaders, including former Prime Minister Yoshihiko Noda and former Finance Minister Seiji Maehara.

Tamaki’s knack for boiling down his policy message to digestible bites via social media has struck a chord with younger voters. He runs his own Youtube channel, and is happy to talk with rolled up sleeves on topics ranging from the state of government debt to the Olympics.

That’s made him a more forward-looking choice for the opposition to coalesce around than Noda of the CDP. Noda stood down as premier in 2012 after overseeing the first rise in the sales tax in over a decade, an unpopular move that sits awkwardly with his current party’s stance on temporarily lowering it. Noda has also rated lower than Tamaki in opinion polls on who should be the next premier.

While the CDP is one of the driving forces of opposition efforts to coalesce around a single candidate, Noda himself appears to recognize his own limitations and has expressed openness to a Tamaki bid.

Tamaki is not without his own blemishes. His leadership of the DPP was suspended for three months in the last year after he essentially admitted reports of an extra marital affair. While he has played the familiar gambit of delineating his private life from his political life, the deception will likely cast a shadow over his credibility for some voters.

Still, the party’s acceptance of his contrition and his return to the helm of the DPP point to a reliance on his political charisma, sharp messaging and potential as a national leader.

Source: Bloomberg

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Gerik

Economic

Political

During a meeting with Argentine President Javier Milei at the White House on October 14, 2025, U.S. President Donald Trump made it clear that any involvement of the Chinese military in Argentina would be met with strong opposition from Washington. The comments came amid discussions on U.S. financial support for Argentina’s economy, particularly the $20 billion currency swap line, which U.S. Treasury Secretary Scott Bessent had confirmed earlier.

Trump’s Warning on China’s Military Presence

In the meeting, Trump stressed that while Argentina is free to engage in trade with China, any military cooperation with the country would be unacceptable to the U.S. “You can do some trade, but you certainly shouldn’t be doing beyond that,” Trump said, referring to Argentina’s ties with China. “Certainly shouldn’t be doing anything having to do with the military with China and if that’s what’s happening, I’d be very upset about that.”

This remark comes in the context of growing concerns over China’s activities in Argentina, particularly the establishment of a space observation center in the Patagonia region. The U.S. has previously speculated that the space station could be used for military purposes, although these claims remain unconfirmed. Argentina’s previous government, led by Alberto Fernandez, allowed China to build a 494-acre space station in Neuquen province, a deal that was renewed under Fernandez’s administration.

U.S. Financial Support and Milei’s Election Challenges

During the same meeting, Trump also emphasized that Argentina’s access to U.S. financial support would depend on Milei’s success in the upcoming midterm elections, set for October 26, 2025. While U.S. Treasury Secretary Bessent had already confirmed that the $20 billion currency swap line was secured, Trump’s comments appeared to underscore the U.S. expectation that Milei’s government would take a firm stance against China’s growing influence in Argentina.

The remarks had an immediate effect on Argentina’s financial markets, with Argentine sovereign bonds dropping following the meeting. Trump’s message was clear: while the U.S. was willing to support Argentina financially, this support was contingent on Milei’s ability to navigate the country’s complex relationship with China.

Argentina’s Response and Diplomatic Tensions

In response to Trump’s comments, Argentina’s Security Minister Patricia Bullrich denied that the space station or any specific Chinese military activities were discussed during the meeting. She confirmed that inspections of the site had taken place and that the Argentine government was actively managing its relations with China, but there were no new developments on the matter.

The issue of China’s presence in Argentina has been a point of contention between the U.S. and China. The U.S. has repeatedly raised concerns about China’s growing military and economic influence in Latin America, while Beijing has defended its actions, accusing the U.S. of “bullying” countries in the region.

President Trump’s warning to Argentina about Chinese military involvement highlights the increasing geopolitical tensions between the U.S. and China, particularly in Latin America. As Argentina faces a crucial election and navigates its economic and diplomatic relations with both the U.S. and China, the outcome of these discussions will shape the country’s future trajectory in the global arena. With U.S. financial support tied to Argentina’s stance on China, Milei’s leadership in the upcoming elections will be closely watched by both domestic and international stakeholders.

Source: Bloomberg

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Economic

Political

On October 15, 2025, Argentina's Economy Minister Luis Caputo reassured markets that the US Treasury would maintain its $20 billion currency swap line with Argentina, regardless of the outcome of the nation’s midterm elections later this month. Caputo, speaking to reporters in Washington, emphasized that the decision to provide this financial support had already been made, with the US administration committed to assisting Argentina in stabilizing the peso.

US Support for Argentina's Currency

The ongoing support from the US Treasury is crucial for Argentina as it grapples with significant currency challenges. While the details of the swap line are still being finalized, Caputo clarified that the US remains committed to the arrangement and will continue to back the peso as needed. This support is vital in maintaining financial stability in Argentina, which has faced substantial inflation and a volatile currency market in recent years.

Despite earlier comments from President Donald Trump, which suggested that the financial support might be contingent on the success of Argentina's libertarian leader, Javier Milei, in the upcoming election, Caputo reassured that the US’s commitment to Argentina’s economic policies remains unchanged. He indicated that Trump’s remarks had been misinterpreted, and stressed that the US support was intended to continue under any circumstances, regardless of election outcomes.

Flexibility in US Treasury’s Approach

Caputo also hinted at the potential for further US interventions in the local currency market. Although he declined to provide specifics on the Treasury’s recent actions, he mentioned that the US has a range of financial tools at its disposal, including foreign exchange market interventions, dollar futures, and bond purchases. This flexibility underscores the US’s readiness to act as needed to support Argentina’s economic stability.

Regarding Argentina’s current currency swap line with China, Caputo made it clear that ending the agreement is not a consideration. The currency swap with China remains an important part of Argentina’s broader financial strategy and will continue to be a key element of the country’s economic toolkit.

In conclusion, the US Treasury's ongoing support for the Argentine peso through the $20 billion currency swap line represents a crucial financial lifeline for the country, especially amid political uncertainty surrounding the upcoming elections. With the US Treasury prepared to take further action as needed, Argentina is poised to continue receiving the support necessary to stabilize its currency and address economic challenges. The continuity of this financial partnership signals a commitment from both the US and Argentina to maintain stability and growth despite external pressures.

Source: Bloomberg

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Economic

Commodity

On October 15, 2025, gold prices reached a record peak of $4,185 per ounce, propelled by heightened geopolitical risks and market expectations of further Federal Reserve rate cuts. The surge in gold, alongside strong performances from other precious metals like silver, platinum, and palladium, reflects growing demand for safe-haven assets amid increasing market volatility. The rising fears over U.S.-China tensions, coupled with a potential rate reduction by the Federal Reserve, have boosted the appeal of bullion as a protective asset.

Gold's Rally and Fed Rate-Cut Speculation

Gold's recent rally has been underpinned by two key factors: concerns over U.S.-China trade frictions and expectations that the Federal Reserve will implement additional interest rate cuts. Fed Chair Jerome Powell’s remarks that the U.S. central bank is likely to cut rates further later this month have contributed to a decrease in Treasury yields, which tends to benefit non-yielding assets like gold. Lower yields make gold more attractive by comparison, as it does not pay interest but tends to rise in value during periods of economic uncertainty.

With this backdrop, gold reached its all-time high of $4,185 per ounce, supported by investor concerns over economic stability and inflation risks. The market’s shift toward precious metals is fueled by the ongoing “debasement trade,” where investors seek refuge from the erosion of fiat currencies due to mounting government debt and inflationary pressures.

US-China Trade Tensions Intensify

The resurgence of tensions between the U.S. and China further amplified gold’s appeal as a safe haven. President Donald Trump’s comments about potentially halting trade in cooking oil with China added fuel to the fire, escalating the trade dispute between the world’s two largest economies. In response to U.S. threats of additional tariffs, Beijing has vowed to retaliate, adding uncertainty to global markets.

This ongoing trade war, coupled with fears of a broader economic slowdown, has pushed investors to hedge against potential risks in traditional markets. The uncertainty surrounding the U.S.-China relationship, combined with the looming possibility of a government shutdown and concerns over the Fed’s independence, have contributed to a shift in sentiment, benefiting gold and other precious metals.

Silver’s Surge and Market Volatility

While gold has stolen the spotlight, silver has also experienced significant volatility. On October 14, silver prices surged to an all-time high above $53.54 per ounce, before falling back amid signs that a historic squeeze in the market may be easing. The price gap between the London and New York silver markets narrowed, but silver remained highly volatile due to a lack of liquidity in London and concerns over future tariffs. The ongoing Section 232 investigation by the U.S. administration, which includes silver, platinum, and palladium, has heightened fears that these metals could be subject to new tariffs, further inflating their prices.

In 2025, the four major precious metals—gold, silver, platinum, and palladium—have surged by between 58% and 80%. Central bank purchases, increased holdings in exchange-traded funds (ETFs), and rate cuts from the Federal Reserve have all contributed to the rally in precious metals. As the global economy grapples with trade disputes, inflation fears, and political uncertainty, demand for these metals as safe-haven assets has increased, driving their prices to historic levels.

Gold’s record high reflects broader market dynamics fueled by escalating U.S.-China trade tensions, economic uncertainty, and expectations of further Federal Reserve rate cuts. The surge in gold, silver, and other precious metals underscores the ongoing shift toward safe-haven assets in times of geopolitical and economic volatility. As investors seek to protect themselves from the risks posed by inflation, government debt, and trade wars, the outlook for precious metals remains strong, with the potential for further price gains in the months ahead.

Source: Bloomberg

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Economic

In a notable rebound for Wall Street’s investment banking sector, Goldman Sachs, JPMorgan, and Citi posted stronger-than-expected third-quarter results, reflecting a return to active dealmaking after nearly three years of stagnation.

CEOs at these banks highlighted the resurgence in mergers, acquisitions (M&A), and financing deals that had been put on hold due to market uncertainty. This recovery signals the end of the long-standing dealmaking drought, with positive momentum expected to continue into 2026.

Goldman Sachs Leads the Recovery

Goldman Sachs emerged as the leader in the dealmaking rebound, reporting third-quarter net revenues exceeding $15 billion, marking its third-highest quarterly result ever. The firm’s advisory revenue soared by 60% to $1.4 billion, driven by a surge in mergers and acquisitions. Total investment banking fees reached nearly $2.7 billion, up 42% from the same period in 2024. Goldman Sachs' equity underwriting revenues grew by 21%, while debt underwriting revenues climbed by 30%.

CEO David Solomon emphasized the favorable regulatory environment, which he believes has encouraged renewed M&A activity. Notable deals the firm advised on included the public offerings of Klarna and Figma, as well as the $50 billion merger between Anglo American and Teck Resources. Goldman’s dealmaking backlog is at a three-year high, signaling a promising outlook for the remainder of 2025 and into 2026.

JPMorgan and Citi Benefit from Increased Deal Activity

JPMorgan’s investment banking division also saw strong growth, with fees rising by 16%. The bank’s commercial and investment banking revenues reached nearly $20 billion for the quarter, boosted by increased M&A and ECM (equity capital markets) activity. CEO Jamie Dimon highlighted the rebound in lending, which mirrors the uptick in deal activity. The firm’s diversified business model contributed to its growth, with executives citing a rise in compensation and front-office employees as signs of a more optimistic future.

Citi’s investment bank generated more than $1.1 billion in fees, marking a 17% increase from the previous year. The surge in dealmaking was attributed to the leadership of Viswas Raghavan, Citi's new head of investment banking. Corporate lending revenue also increased by nearly 40%, as clients turned to Citi’s balance sheet for support in a more favorable market environment.

Challenges and Risks Ahead

Despite the strong earnings results, some caution remains. JPMorgan’s CFO Jeremy Barnum warned that market conditions could change quickly, and continued political uncertainty, such as the ongoing U.S. government shutdown, could stall capital markets activity. Furthermore, while the rebound in lending and deal activity is encouraging, there are concerns about whether the current momentum can be sustained in the face of potential market volatility.

The Q3 2025 earnings results from Goldman Sachs, JPMorgan, and Citi demonstrate a strong recovery in the investment banking sector, driven by an uptick in M&A activity and dealmaking. With deal volumes for transactions over $5 billion increasing significantly this year, the outlook for Wall Street’s bankers is improving. However, risks remain, including the potential for geopolitical and economic disruptions that could impact the broader market and deal flow. Still, for now, Wall Street banks are benefiting from a revived dealmaking environment, setting a positive tone for the remainder of 2025 and beyond.

Source: Business Insider

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Economic

On October 14, 2025, Federal Reserve Chair Jerome Powell signaled that the Fed may implement additional rate cuts at its upcoming meeting on October 28-29. Powell noted that while the outlook for inflation and employment hasn't changed drastically since the September meeting, the "downside risks to employment appear to have risen," indicating that economic conditions may require further action to stabilize the labor market.

Increased Employment Risks and Potential Rate Cuts

Powell's remarks suggest that the Fed is carefully monitoring employment data, with the possibility of cutting rates to address rising risks. Although the central bank's 19-member Federal Open Market Committee (FOMC) has previously projected two additional rate cuts for the year, Powell emphasized that monetary policy decisions would continue to be made on a meeting-by-meeting basis.

Despite the challenges posed by the ongoing government shutdown, which has delayed key economic data, Powell indicated that the Fed is assessing private-sector data to fill in gaps. Data such as state-level unemployment claims and payroll processor ADP’s reports have shown that layoffs remain low, but both job availability and hiring difficulty are trending downward.

The Role of Data in Policymaking

Powell stressed that while the official jobs report for September remains delayed, the Fed uses private-sector data as a supplementary tool to gauge economic conditions. The absence of crucial government data, including the September jobs report, has made it more challenging for the Fed to fine-tune its policy. However, Powell reiterated that the September jobs report would be an essential data point for determining the next steps for monetary policy.

The uncertainty created by the government shutdown could lead to further difficulties in formulating policy, particularly as the Fed would miss important economic data for October. Powell acknowledged that this lack of timely information could complicate the central bank's decision-making process.

Inflation Outlook and Tariffs

On the inflation front, Powell stated that private-sector surveys and data continue to show that price increases in goods are primarily driven by tariffs rather than widespread inflationary pressures. This observation suggests that the Fed may continue to focus on managing inflationary impacts stemming from trade policies while balancing employment concerns.

In conclusion, Federal Reserve Chair Jerome Powell’s comments indicate that the central bank is navigating heightened risks in the labor market and potential inflationary pressures. While the Fed remains cautious, further rate cuts may be considered to ensure economic stability. Powell’s emphasis on flexible, data-driven policymaking underscores the central bank's commitment to adjusting its approach based on evolving economic conditions, especially in light of the uncertainty caused by the ongoing government shutdown.