MacroscopeIran war: Why a Trump climbdown won’t save Asia’s economies
Markets might be convinced Trump will chicken out again, but that won’t reassure Asian nations scrambling to deal with energy shortages
Early last year, analysts were worried about Asia’s heavy reliance on exports to the United States. Morgan Stanley pointed out that seven of the 10 countries running the largest trade surpluses with America were in Asia, putting them firmly in the crosshairs of the Trump administration. The bank also noted that Taiwan, South Korea and Japan derived between 15 and 30 per cent of their corporate revenues from the US.
Yet by the end of last year, Wall Street banks were singing a different tune. In a report last November, JPMorgan said: “Asia dodged a bullet in 2025. Steep ‘Liberation Day’ tariffs were expected to markedly slow growth, but the region showed remarkable resilience.”
In a report on March 17, Goldman Sachs said the supply shock was “unambiguously bad for Asia”. Noting that “every economy of significance” in the region is an oil importer, it said “the surge in energy prices complicates – and, in more adverse scenarios, would derail – what had been a fairly positive outlook for many economies (especially China, Japan and tech-exposed exporters) in 2026”.