Tariff war adds to risk facing some APAC banking sector outlooks: Fitch

FITCH Ratings said it had anticipated broadly stable operating conditions across most APAC banking systems in 2025, but a surge in US tariffs could threaten this assumption in some markets.

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The effect of the trade war on specific banking systems in the region will depend on final tariff outcomes, their impact on local economic growth, banks' exposure to vulnerable sectors, and the potential for changes in fiscal, monetary or credit policy.

"Our current Neutral outlooks for the Korean, Taiwanese and Thai banking sectors in 2025 could move to Deteriorating if there are substantial further increases in US tariffs beyond the 10% tariff imposed on all US trade partners on 2 April, or if the hit to their economic growth is more severe than we had expected. This could occur if the US moves ahead with the higher country-specific “reciprocal tariffs” that are currently paused, for example, or because of higher tariffs on sectors such as electronics (including semiconductors)," Fitch said.