HSBC: Uncertainty in Tariffs Likely to Slow Manufacturing Sector Investments in Asia

HSBC economists argued that uncertainty regarding the development of the U.S. tariffs during the Trump era will slow down foreign direct investments in Asia and affect growth in the region. According to a report prepared by Frederic Neumann and other economists at HSBC, manufacturers are likely to slow down cross-border investments until the outlines of U.S. trade policy become clearer. Experts noted that a downturn in manufacturing investments could hit regional growth harder than exports, indicating that shipments might increase in the short term as U.S. importers rush to get ahead of the tariffs. HSBC mentioned that if U.S. trade restrictions remain largely focused on China or if a broader application is less severe than feared, manufacturing investments should recover strongly. However, they emphasized that if U.S. policy becomes more broadly based and restrictive, manufacturing investments could be affected more permanently.