Fresh off his election victory in early November, President-elect Donald Trump has already been making headlines with threats of upcoming trade tariffs when he takes office in January 2025.
Given Asia is dependent on open trade and continues to be home to some of the world’s fastest-growing regions, it’s reasonable to expect that the continent will be impacted in various ways by a second Trump presidency.
How exactly could President-elect Trump affect Asian economies? Here are 2 big industries in Asia that investors should be watching as Trump takes office for a second time.
Chinese E-Commerce
China has one of the world’s largest e-commerce markets and with that comes an insatiable online demand for goods. However, many of China’s largest e-commerce players have also made a name for themselves in other global markets.
Some of them include Alibaba Group Holding Ltd (NYSE: BABA) (HKEX: 9988) and its international e-commerce division, Lazada, as well as PDD Holdings Inc’s (NASDAQ: PDD) Temu and ByteDance’s wildly-popular social commerce platform TikTok.
With China still being the default “world’s factory” for mass-produced goods, such as clothing or toys, any meaningful across-the-board tariffs will inevitably hurt sizeable e-commerce players in China. That’s because many have a substantial presence in the US.
For example, PDD Holdings’ Temu platform has caught on like wildfire in the US among younger consumers who are drawn to its uber-low prices, while young people selling goods on TikTok is a trend that has also taken off.
Share Of Temu’s Gross Merchandise Value (GMV) By Region – January 2024
Source: Six Degrees Intelligence Expert Interview, TechBuzz China
There’s also Chinese fast-fashion label Shein, which has been selling its low-cost garments at massive scale to US consumers.
If a second-term Trump were to clamp down and impose high tariffs on Chinese imports into the US, it would certainly hit the e-commerce businesses of these Chinese tech giants and hinder their recent rapid growth in the US market.
Read also: Donald Trump Is US President (Again). Here Are 5 Things That Singapore Investors Should Take Note Of
Electronics Exporters
Another industry in Asia that could be impacted by Trump is electronics, particularly electronics exporters. Many Asian countries have built a stellar reputation for producing quality hardware and this manufacturing progress could be thwarted by any additional tariffs that Trump decides to impose.
Whether it’s smartphone handset producers, like Apple Inc (NASDAQ: AAPL), or large-screen OLED TV screen manufacturers in Korea, those in the electronics sector that look to export to the world’s largest consumer market will face further headwinds.
Other electronics-related players, like semiconductors or advanced medical devices manufacturers, could also be impacted by Trump’s desire to “onshore” production of critical technologies by bringing the manufacturing of these products back to the US. Whether that actually happens is another matter altogether.
In fact, accelerated moves to diversify the supply chains of goods away from China – a key strategic competitor to the US – could potentially benefit some Asian countries, such as India and Vietnam, under a second Trump presidency.
Trump’s Second Term: Winners And Losers In Asia
While a second Trump presidency is likely to bring more drama (and trade tariffs), it could also – ironically – benefit some Asia countries and their burgeoning industries.
The largest negative impact may be on Chinese exporters if, as Trump claims, he imposes a tariff of 60% or more on all Chinese imports once he’s in office. His other promise of 10% to 20% across-the-board tariffs on all other countries importing into the US means that other Asian manufacturers will have an advantage over China when importing into the world’s largest consumer market.
This may also have a positive spill-over effect on garment manufacturing hubs like Vietnam and Bangladesh. Meanwhile, for electronic devices, countries such as Vietnam, Malaysia, and India may see their share of US imports rise in a second Trump presidency. Nevertheless, industry watchers need to be vigilant as Trump has also threatened a 100% tariffs on BRICS nations.
Read Also: What A Donald Trump Presidency Would Mean For Sustainability
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