Déjà vu in Asia

Regional economies are hit hard by the Iran war  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

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Welcome to Balance of Power, bringing you the latest in global politics. If you haven't yet, sign up here. It's perhaps not surprising that the region that uses the vast majority of the oil that transits through the Strait of Hormuz is most anxious about its closure. While bountiful US energy supplies give President Donald Trump confidence to call for others to ensure the strait reopens, leaders in Sydney, Seoul and Singapore have no such luxury. Already, there's a scramble on across Asia to secure alternative — including Russian  — supplies and to try to minimize the spike in prices and the blow to households and factories. There's a kind of Covid déjà vu emerging where those with the weakest buffers look set to get hit the hardest. In the case of the pandemic, keeping out the virus was the first line of defense for economies in its early days; now, it's all about reserves and alternatives. Case in point: China, where vast stockpiles and alternative energy supplies seem to be insulating the economy. A measure of manufacturing activity bumped back into expansionary territory in March even as input prices jumped, leaving its export-fueled strong start to the year intact. Economies with weaker buffers appear more vulnerable. The Philippines — where a national emergency has already been called — Indonesia and Vietnam led a slide in the S&P Global ASEAN Manufacturing Purchasing Managers' Index to its lowest figure since last September. India and most of South Asia is already seeing the war hit their economies. While there are some beneficiaries — energy producers Australia and Malaysia may gain an edge from higher oil, gas and coal prices — even then there's a cloud to the silver lining. The Australian central bank has been forced to hammer households with rate hikes to keep inflation in check. Just like Covid, much will depend on how long the supply shock lasts. But a month in, it's looking like Asia is again among the first to see the economic fallout. — Malcolm Scott Buyers queue for liquefied petroleum gas in Noida, India, on March 16. Photographer: Anindito Mukherjee/Bloomberg Global Must Reads Trump will give an update on the war in Iran at 9 p.m. in Washington today, the White House said. The president told reporters he foresaw ending the conflict within two to three weeks, suggesting the US had largely accomplished its military goals and would leave other nations to resolve issues with the Strait of Hormuz, while adding that Iran could still reach a deal with the US by then. Bloomberg's Stephen Stapczynski reports on the oil price dropping on optmism the war may be nearing an end. Europe is expected to have enough jet fuel to avoid shortages in April, but that situation could change in May as the Middle East conflict rocks global energy markets, sources say. The European Union will consider reopening a set of energy measures used after Russia's 2022 invasion of Ukraine as the bloc seeks to contain a price shock tied to the war on Iran. Every week that passes without a face-to-face meeting between Trump and Chinese President Xi Jinping gives fresh grievances time to accumulate. That growing list is testing both sides' ability to keep ties steady between the world's top economies. With a much anticipated leaders' summit delayed to mid-May, the White House has signaled its intent to keep things on track. Russia and Ukraine are preparing to intensify fighting again with winter snows giving way to spring on the battlefield and hopes for a diplomatic resolution being set back as fighting in the Gulf consumes Trump's attention. Russian forces are making some creeping gains and Ukrainian troops are pushing forward in other areas, but neither army appears able to make a decisive breakthrough. A P1-Sun interceptor drone during testing at an undisclosed location in Ukraine on March 17. Photographer: Andrew Kravchenko/Bloomberg Europe's financial supervision battles are usually fought diplomatically — a tersely worded statement here, a veiled signal there. But the tiny island of Malta — home to golden visas, legalized cannabis and a massive gambling industry — has been openly railing against plans to centralize crypto supervision under the Paris-based European Securities and Markets Authority, seeing it as a politically motivated assault on its success in attracting big industry names. India rolled back a huge hike in jet-fuel prices for local flights within hours of pushing them to a record, bringing fresh turbulence to an industry that's been rocked by the Iran war. Greece's stocks were upgraded to developed-market status by MSCI, marking a milestone in the country's recovery from a debt crisis that at the time was a key threat to the euro-area economy. A year since Trump tripped up global financial markets with his so-called Liberation Day tariffs, the investment playbook his move inspired has been firmly put on the shelf. French prosecutors are seeking terrorism charges against an adult and three teens aged 16-17 over a foiled bombing attack near the Bank of America office in Paris, seen as a likely retaliation to the war with Iran. Sign up for the Washington Edition newsletter for news from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Poverty in Argentina fell to the lowest level since the first half of 2018 in a victory for President Javier Milei, even as the disinflation process stalls. Austerity and a tightly controlled currency thwarted the pace of price increases in the second half of the year, combining with boosts to some social welfare spending. Even so, Milei's approval rating this month hit its lowest since he took office. And Finally Brazil's Workers' Party, founded by President Luiz Inácio Lula da Silva, has lost touch with its core support and has to "reflect on our trajectory" to compete, he says — a task given all the more urgency ahead of October elections that polls suggest Lula is in danger of losing to the right. The left's struggles to resonate with its base is a phenomenon witnessed from Trump's America to Germany's fractured politics, with the loss of manufacturing jobs overseas among the drivers. Food-delivery couriers rally during a national strike in São Paulo in March 2025. Photographer: Victor Moriyama/Bloomberg More from Bloomberg Check out our Bloomberg Investigates film series about untold stories and unraveled mysteries Next China for dispatches from Beijing on where China stands now — and where it's going next Next Africa, a daily newsletter on where the continent stands now — and where it's headed Economics Daily for what the changing landscape means for policymakers, investors and you Green Daily for the latest in climate news, zero-emission tech and green finance Explore more newsletters at Bloomberg.com We're improving your newsletter experience and we'd love your feedback. If something looks off, help us by reporting it here. Follow us You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, sign up here to get it in your inbox. Unsubscribe Bloomberg.com Contact Us Bloomberg L.P. 731 Lexington Avenue New York, NY 10022 |