TOKYO, April 1 (Reuters) - In March, factory activity in Asia largely declined as the escalating U.S. tariff conflict and decreasing global demand negatively affected business confidence, according to private sector surveys released on Tuesday, clouding the economic outlook for the region.
China stood out as an exception in a generally negative array of purchasing managers' indexes, indicating an increase in activity in the world's second-largest economy, as manufacturers hurried to deliver products to clients before U.S. tariffs came into force.
The potential for an expanding global trade war is increasing challenges for policymakers as they attempt to mitigate the impact on growth and control inflationary pressures stemming from escalating costs.
In other parts of Asia, surveys indicated that Japan, South Korea, and Taiwan experienced a decrease in manufacturing activity in March, as businesses prepared for further unpredictability regarding U.S. trade policy. Since assuming office in January, U.S. President Donald Trump has implemented several tariffs on trading partners, including a proposal for increased taxes on imported automobiles.
China's Caixin/S&P Global manufacturing PMI rose to 51.2 in March from 50.8 in February, surpassing market predictions and remaining above the 50.0 threshold that distinguishes expansion from shrinkage.
The recovery closely matched an official PMI published on Monday, indicating that manufacturing activity is expanding at its fastest rate in a year.
However, analysts predict that the respite will be brief since the trade war risks dampening momentum. Since January, Trump has implemented a total 20% tariff on imports from China and is likely to reveal more "reciprocal" tariffs this week.
Japan's manufacturing sector experienced its steepest decline in a year, as indicated by its PMI, marking the ninth consecutive month of decrease.
The decline in South Korea's factory activity has also accelerated, affected by sluggish domestic demand. Taiwan's PMI dropped to 49.8 in March, down from 51.5.