Fitch says US-APAC trade deals to reduce uncertainty and lift growth

FITCH Ratings said this week that the recent series of bilateral trade agreements between the US and several APAC countries reduce uncertainty around the outlook for Asia's exporters, and could provide a slight lift to GDP over the next few years for the countries involved.

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However, many details are still to be clarified, and tariff rates remain subject to change.

Over 20 to 30 October, the US announced deals with China, Japan, Korea, Vietnam, Malaysia, Thailand, Australia, and Cambodia. The greatest economic impact is likely to stem from a halving of the 20% fentanyl-related US tariff on China; this would reduce its effective tariff rate on China by around 10pp, other things being equal. The US and China have also agreed to pause for one year their recent tightening of trade restrictions, involving China's curbs on rare earth exports, the US extension of export licensing requirements to companies majority-owned by entities on its key restriction lists, and higher bilateral tariffs.