Asia Strategy: Tariff Risks By Market

The Asian IG and HY indices have widened by close to 10 bp and 30 bp, respectively since we shifted our view on both post the 2024 US election in November; we anticipate Asian credit spreads to change throughout 2025 amid increased US and global macro volatility. We retain a careful perspective towards both credit and duration risk.

We highlight market segments and issuers in Asian credits that are most affected by US tariff and policy risks in this report; ; among the 10 Asian market segments, we observe the most significant impact on Korean corporates; we also highlight 11 individual issuers facing challenges from a fundamental/operational perspective.

Steel, semiconductor, and EV battery supply chain companies are particularly impacted by US tariffs among South Korean corporates; South Korean steel maker POSCO might encounter significant challenges from potential US tariffs on auto and home appliance imports;