Asia’s Stock Rally Faces Tariff Shock as Trump Levies Bite Into Earnings

Fund giants including T. Rowe Price and Franklin Templeton warn that companies across Asia, particularly in South Korea and Taiwan, are more exposed to tariff impacts than investors realize. Export-heavy industries, which enjoyed months of gains, now face earnings shortfalls as the WHITE House refuses to back down on new trade policies.

The MSCI Asia index surged over 20% this year, outpacing the S&P 500’s 12% gain, fueled by cheap money and AI hype. But Trump’s April tariffs—34% on Chinese goods, 50% on India, 19% on Indonesia, and 15% on Japan—are now cutting through the optimism. These levies target nations with massive trade surpluses, directly threatening regional exporters.

Clarence Li, a senior portfolio analyst at T. Rowe Price in Hong Kong, confirms earnings haven’t yet reflected the full tariff impact. The firm has already reduced Asia and emerging market positions tied to exports, opting not to wait for the fallout.