Asian economies may bear brunt of US tariff

Brokerages fear significant impact of reciprocal tariff on firms, mkts

- PUNEET WADHWA

The sweeping tariffs proposed across sectors by US President Donald Trump are set to come into effect starting April 2, with most analysts worried about their impact on firms, and in turn the financial markets.

Recently, the US administration signaled that it will impose sectoral tariffs on energy, pharmaceuticals, semiconductors, agriculture, copper, and lumber.

The potential implementation of this, wrote Chetan Ahya, chief Asia economist at Morgan Stanley, in a recent co-authored note, will almost affect all economies in Asia directly either via economy-specific tariffs, or sectoral tariffs.

"On April 2, we are expecting that the US will propose a plan for addressing reciprocity in trade relations. But our key concern remains that elevated levels of policy uncertainty weigh on capex and trade, damaging the business cycle," Ahya said.