Equity Research

Recognizing uncertainty about the timing, magnitude, and scope of US tariffs, we evaluate a broad risk case of a 10% US universal tariff to gauge how Asian equities may be impacted. By market, Taiwan (35%), Korea (23%), and Japan (18%) have the highest index constituent goods revenue exposure to the US. Hardware (37%), autos (20%), and healthcare (14%) have the highest US share of sector revenues from goods exports; software (50%) leads the services category. Overall, 12% of MSCI Asia Pacific ex Japan index revenues come from goods exports to the US. Our modeling indicates a 3% hit to regional earnings and a 4% decline in regional valuation from a 10% US bilateral tariff.