Trump’s Policies Could Reshape Asian Stock Markets : Stock traders in Asia are ramping up activity around the “Trump trade” as they prepare for the potential re-election of former US President Donald Trump. The expectation is that Trump’s “America First” policies on trade, defense, and other industries will create both winners and losers in the region.
Here We Know, How Trump’s Policies Could Reshape Asian Stock Markets
Impact on Sectors and Industries
Trump’s policies are expected to impact a variety of sectors in Asia, including agriculture, farm equipment, textiles, and weapons production. Additionally, the momentum of Asian companies in the global race for electric vehicles and semiconductor chips could slow under a Trump administration due to his pledges.
China: A Clear Loser
China is seen as a clear loser, given Trump’s call for higher tariffs and confrontational rhetoric against the world’s second-largest economy. Fabiana Fedeli, Global CIO for Equities, Multi-Asset & Sustainability at M&G Investments, noted, “China’s obviously going to be one of the most affected if those tariffs really come in place.” She added that many companies are diversifying their markets or starting to build manufacturing facilities outside of China to mitigate these risks.
India: A Potential Beneficiary
India is deemed a potential beneficiary if Trump wins in November. Homin Lee, Senior Macro Strategist at Lombard Odier, remarked, “India stands out as an economy that is relatively shielded from these shocks.” Anand Gupta, Portfolio Manager at Allianz Global Investors, echoed this sentiment, suggesting that India’s relationship with the US has been relatively stable under Trump compared to other emerging markets.
Taiwan and South Korea: Facing Downturns
Taiwan and South Korea, heavily reliant on export revenues from the semiconductor and tech sectors, are expected to face a downturn. Market watchers believe the Trump administration’s recalibration of US strategy could significantly impact these countries’ economies.
Japan: Balanced Risks
For Japan, the risks appear (Trump’s Policies Could Reshape Asian Stock Markets) more balanced. Homin Lee of Lombard Odier stated, “Japan’s sensitivity to global trade is a bit lower, and its relations with the US will likely remain solid even under the Trump administration.” He also noted the opportunity for Japan to cement its semiconductor sector renaissance if Taiwan or South Korea bear the brunt of US policy changes.
Southeast Asia: Mixed Prospects
Southeast Asia presents a mixed outlook. Jasmine Duan, Senior Investment Strategist at RBC Wealth Management Asia, pointed out that Vietnam, Taiwan, and Malaysia might benefit from supply chain shifts, particularly in electronics and lower-end manufacturing. However, Mark Mobius, Chairman of Mobius Emerging Opportunities Fund, warned that Vietnam could face challenges due to its significant manufacturing of Chinese goods, despite its growing role in manufacturing for Korea.
As markets across Asia adjust to the potential of a Trump re-election, investors are closely watching developments and preparing for a range of outcomes.