Who wins and who loses in Asia from Trump’s tariffs?

In its recent article, Bloomberg highlights that the global economy faces a fresh wave of uncertainty as US President Donald Trump's latest tariffs spark a ripple effect across Asian markets.

Asian stocks, particularly those dependent on exports such as Japanese automakers and Chinese e-commerce companies, plunged following the announcement of new tariffs by US President Donald Trump, marking the onset of a fresh round of global trade tensions.

Trump revealed that tariffs of 25 per cent would be applied to Canada and Mexico, while a 10 per cent tariff would be imposed on China. He also hinted at a similar move for the European Union in the future. As a result, the MSCI Asia Pacific Index dropped more than 2 per cent during Monday’s trading session, experiencing its largest intraday decline in six months.

While investors in Asia had been preparing for the effects of Trump's proposed tariffs, some had hoped for a delay or avoidance of these measures following his relatively softer rhetoric on China. Nevertheless, analysts predict that corporate earnings in the region will be negatively impacted, especially as many Asian economies rely heavily on exports to the US.

The new tariffs are expected to hurt China’s exports, which could exacerbate the country's already fragile economy. In response, Beijing may introduce more aggressive stimulus measures to mitigate the effects. 

“From a macro perspective, we think Asian equities might be impacted by potentially higher US dollar,” said Nomura Holdings Inc. strategists, including Chetan Seth, in a note. “We also believe investors will focus on identifying sectors or areas in China that are more vulnerable to these tariffs.”

Here are some of the sectors in Asia that were most affected by Trump’s trade war:

Automakers
Japan’s largest automakers, heavily reliant on North America, saw a significant impact as they manufacture or assemble cars in Mexico near the US border. Shares of Toyota Motor Corp., Honda Motor Co., and Nissan Motor Co. all dropped by at least 5 per cent.
South Korean automaker Kia Corp., with a plant in Mexico, also experienced a decline of more than 5 per cent.
Chinese electric-vehicle manufacturers aiming to expand in the US market, such as Li Auto Inc. and XPeng Inc., were hit by the new tariffs, with their shares dropping by at least 6 per cent in Hong Kong.
Other non-automotive manufacturers in the region with plants in Mexico, including LG Electronics Inc., also saw a slump.

E-Commerce
Shares of Chinese e-commerce platforms like JD.com Inc. fell as Trump’s plans eliminated a long-standing tariff exemption for packages valued at less than $800.

Chinese companies producing small durable items, which make up a significant portion of so-called de-minimis shipments, such as clothing, accessories, home goods, and electronics, also experienced stock declines. Shares of sportswear maker Li Ning Co. and home appliance maker Haier Smart Home Co. dropped by more than 7 per cent.

Chips

Asia's largest chip exporters, including Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co., saw their shares fall after Trump announced that he would impose tariffs on chips, reaffirming this stance after his meeting with Nvidia Corp. CEO Jensen Huang.
Japanese semiconductor equipment manufacturers, which generate a significant portion of their revenue from China, also experienced a downturn. Shares of Tokyo Electron Ltd., Advantest Corp., and Disco Corp. each fell by at least 2 per cent.
Some Taiwan-based AI-related firms with production in Mexico also took a hit, with Quanta Computer Inc.'s shares down nearly 10 per cent.

China’s Self-Reliance

Shares of Chinese chipmakers, such as Semiconductor Manufacturing International Corp., saw a rise on Monday as traders speculated that Trump's tariffs might accelerate China’s drive for industrial self-sufficiency. Beijing has been focusing on strengthening its artificial intelligence chip manufacturing capabilities as Washington tightens export restrictions on cutting-edge technology to China.

Oil Refiners

Analysts suggest that Asian oil refiners may benefit from the US tariffs, with companies like S-Oil Corp. performing better than the broader market. Trump’s trade levies on oil imports from Canada and Mexico could give Asian refineries a competitive advantage over US counterparts, while their profit margins are supported by higher product prices.

By Naila Huseynova