The impact of US tariffs on Asian markets

THE imposition of US tariffs has had significant repercussions on Asian equity markets, with most markets experiencing elevated volatility. Over the long weekend, China announced the imposition of tariffs on a wide range of US imports, including agricultural products, automobiles, and chemicals, and the US administration has in turn announced an additional 50 per cent tariff on China. Other nations, such as India and South Korea, are looking to review and adjust their trade policies, seeking to diversify their export markets and reduce dependency on the US.

While most countries are planning bilateral negotiations with the US, there are significant uncertainties in the near term and investors are concerned about increased costs and reduced demand for Asian exports affecting the region’s economic growth. The uncertainty surrounding trade policies may cause further fluctuations in financial markets.

The imposition of tariffs has a negative impact on economic growth, particularly in export-oriented markets such as Thailand, South Korea, and Vietnam. While negotiations and deals with the US will take place, the ease of these negotiations will vary between countries. For instance, India may find it easier to navigate these challenges compared to China. It’s important to note that US exports constitute a small portion of China’s overall economy, making the impact less significant compared to a market such as Vietnam.