Emerging Asia Outlook_ Tariff rollercoaster

Summary of Barclays Emerging Asia Outlook Industry/Company Involved - Industry: Emerging Asia Economic Outlook - Focus: Impact of US trade tariffs on Emerging Asia economies Core Points and Arguments 1. Impact of US Trade Tariffs: The 10% US trade tariffs on China and retaliatory actions are expected to negatively affect Emerging Asia, particularly export-oriented economies like Taiwan, which is more vulnerable than Korea or Singapore [2][5][6] 2. Economic Sensitivity: Emerging Asia's historical growth sensitivity to China and the US indicates that newly industrialized economies are the most vulnerable to global trade tensions [2][5] 3. Limited Impact from Mexico and Canada: The direct economic damage from tariffs on Mexico and Canada is expected to be limited for Emerging Asia, as these countries account for only 1-4% of merchandise exports from the region [4][8] 4. Indirect Exposure: Despite limited direct exposure, Emerging Asia's indirect exposure to the Mexican export channel to the US is comparable to its dependence on the Chinese export channel [4][13] 5. Proactive Strategies: Some governments in Emerging Asia are adopting proactive strategies to avoid US tariffs, similar to strategies employed during previous trade tensions [13][15] 6. Monetary Policy Adjustments: The Reserve Bank of India (RBI) cut the policy repo rate by 25 basis points, with expectations for further cuts due to low growth and manageable inflation [16][17] 7. Philippines Rate Cut Expectations: The Bangko Sentral ng Pilipinas (BSP) is expected to cut rates by 25 basis points amid concerns about growth and inflation remaining below target [18][26] 8. Political Uncertainty in the Philippines: The impeachment of Vice President Sara Duterte could create political uncertainty, potentially impacting financial markets as elections approach [19][20] Other Important but Possibly Overlooked Content 1. Economic Data Review: Recent economic data from various countries in Emerging Asia shows mixed results, with some countries like Korea experiencing a trade balance deficit while others like Malaysia show a recovery in merchandise trade surplus [22][28] 2. Future Economic Projections: Projections for GDP growth in India suggest a gradual increase, with expectations of 6.7% in Q1 FY25-26 and 7.0% in FY26-27 [30] 3. Inflation Trends: CPI inflation in India is expected to moderate, while other countries like Indonesia show signs of declining inflation rates [24][30] 4. Trade Balance Trends: India's trade balance is projected to improve, with expectations of narrowing deficits in the coming months [25][30] This summary encapsulates the key insights from the Barclays Emerging Asia Outlook, highlighting the economic implications of US trade policies and the responses from various countries in the region.