Yesterday Japan’s trade ministry announced ¥15 billion in subsidies for ENEOS, Idemitsu and Cosmo to complete refinery refits by year-end that will allow them to process more US energy and reduce reliance on Middle Eastern suppliers. As the largest investors in US shale and LNG, Mitsubishi and JERA are well placed to benefit from continued growth in US energy exports. Given the South Korea tariff deal with Trump contained very similar energy commitments, this story could also be read as tariff coercion producing parallel, independently negotiated outcomes in East Asia. Ironically, the geopolitical winners here would be India and China, who absorb the discounted Middle Eastern and Russian barrels that Japan/Korea are diversifying away from, strengthening Beijing's and New Delhi's leverage with Russia and the Gulf.
The Directorate of Revenue Intelligence (DRI) is investigating Samsung and LG paying only 5% instead of the full 15% tariff rate for imported OLED parts. Sony and Panasonic are next in line as both firms use the exact same OLED import-and-assembly structure that is now under DRI scrutiny. We’ve seen this before with the DRI in India's auto sector: a 2022 probe into Volkswagen widened to Kia, Mercedes-Benz and BMW. Chinese electronics maker TCL, which manufactures locally in India, stands to gain market share as its South Korean and Japanese rivals face growing customs scrutiny over the coming year.
PwC’s audit failures at Evergrande led Chinese regulators to impose major penalties and suspend the firm, turning auditor risk into a board-level concern for state-linked companies. The revised Audit Law regulation announced yesterday, and effective 1 December 2026, applies further pressure on foreign auditors by allowing the National Audit Office to refer suspected audit violations directly to China’s securities regulator (in essence formalising the enforcement route used against PwC over Evergrande). Because KPMG and EY absorbed the largest share of PwC’s former state-linked clients following the fiasco, they are now the foreign firms most exposed to this uneasy regulatory environment. And with banks such as Bank of Nanjing and Industrial Bank already moving away from the Big Four towards domestic firms, expect to see KPMG and EY partners checking over their shoulders.
India’s trade deal with the EU, due to be signed on 16 December, will give its pharmaceutical and technology exporters access to EU markets while keeping agriculture off the table. But, those protected sectors are precisely where US agriculture has been seeking greater access from a US–India trade deal. By giving Indian exporters another major market without agricultural concessions, the EU agreement reduces Washington’s leverage in its own trade negotiations with New Delhi. So, once the US midterms are over in November, the Trump administration is likely to turn to Russian-oil tariffs as its main pressure point. Reliance will be the likely target as India’s largest buyer of Rosneft crude — it accounts for more than 90% of India’s US-bound refined fuel exports.
Amidst rupiah depreciation volatility, Bank Indonesia has yet to expand currency protection tools to cover trade financing. This exposes businesses reliant on imports. KLBF, Southeast Asia’s largest pharmaceutical firm by market cap, will be hit hard because it imports roughly 90% of its active pharmaceutical ingredients (API). Chinese and Indian suppliers, which account for two thirds of KLBF’s API imports, will gain greater pricing power as a weaker rupiah pushes up KLBF’s import costs. KLBF typically holds three months of imported inventory, similar to the two-to-four-month buffer it maintained during the rupiah depreciation episodes of 2015 and 2018 — those reserves are about to be sorely tested.
China’s new licensing restrictions are set to tighten rare earths and graphite anode materials exports, both critical inputs for battery cells. Korean battery makers remain heavily reliant on Chinese graphite, leaving them exposed to higher costs and weaker short-term profits. POSCO Future M, South Korea’s only producer of non-Chinese graphite anodes stands to benefit as battery makers will shift away from China.
The Bank of Japan raised its policy rate to a 31-year high of 1.25%, citing AI-related investment as an inflation risk. Another rate increase to 1.5% expected by December. Record high rates are lifting lending margins at Mizuho, MUFG and SMFG. Japan’s push to attract AI investment is also raising financing costs for the foreign companies building that infrastructure, while shifting more of the gains from the investment boom towards domestic banks. SMFG looks to benefit the most with most of SMFG’s lending book concentrated in domestic loans — but Mizuho and MUFG also look to have a strong quarter, while TSMC and hyperscalers such as Microsoft, Amazon and Google building AI data centers in Japan face rising financing costs.
The Supreme Court’s September 22 criticism of excessive cancer-drug prices increases pressure on the National Pharmaceutical Pricing Authority to expand limits on the margins charged on patented cancer medicines. Roche’s Herceptin (trastuzumab) and Avastin (bevacizumab) are among the most likely early targets because both drugs have faced price disputes in India and already compete with established domestic generic alternatives, CANMAb and Abevmy from Biocon. As margin caps squeeze profits, foreign suppliers will struggle to match the production scale of domestic generic manufacturers. Better able to sustain high volumes at lower margins, domestic generics producers are therefore positioned to gain market share. Roche therefore faces the most immediate exposure, while AstraZeneca, Novartis and Bristol Myers Squibb face less risk because their leading patented cancer drugs do not yet have established Indian biosimilar competitors.
China–ASEAN trade is set to increase as the People’s Bank of China eases cross-border settlement and Hong Kong moves closer to joining the Regional Comprehensive Economic Partnership. So foreign banks (HSBC and SC) with established Southeast Asian networks will capture more MNC trade-finance business, squeezing domestic Chinese banks (who relied on the payment barriers to stay competitive). Beijing will accept the heat from domestic banks to bring more regional trade onto the renminbi payment system.
Indonesia’s newly-released e-commerce rules require platforms to give locally made products greater visibility in search rankings sidelining previous local distribution requirements. This will force foreign brands to shift partnerships and commercial control toward local producers or face less marketplace visibility.
The local R&D partnership signed yesterday gives Japanese chipmakers privileged access to local engineers and technical partners in Vietnam. Japanese firms will therefore face lower barriers over their US and Korean rivals.
Launching in January 2027, the Indonesia Commodity and Mineral Exchange will establish domestic price floors as Jakarta simultaneously restrains nickel output. Tighter ore supply will hit standalone processors hardest, particularly foreign-funded smelters that depend on purchases from third-party mines. Because foreign companies can only hold minority stakes, they will need to partner with domestic mining firms. With Indonesia supplying roughly two-thirds of the world's nickel, tighter control will frustrate the US and China as Jakarta’s leverage over their battery supply chains grows.