By Harry Wu, 21st Century Business Herald, SFC

The impact of US tariffs was visible on Asian exports, but mainly in the non-tech exports, said Sonal Varma, Chief India and Asia ex-Japan Economist at Nomura in an interview with 21st Century Business Herald.

As the effects of US tariffs gradually emerge, different industries in Asia are experiencing varying degrees of impact. Varma said non-tech product exports are actually very weak, especially in industries hit by high tariffs, such as steel and aluminum. On the other hand, given the strong demand for AI, coupled with the fact that US President Donald Trump did not previously impose tariffs on semiconductors and electronics, technology product exports have actually performed better, supporting overall exports.

Varma found that some of the tariffs have already been absorbed by Asian exporters, especially small and medium-sized enterprises (SMEs), whose profit margins are under pressure. Therefore, although it is not apparent at the overall level, a more detailed analysis shows that the tariffs have already had an impact.

For most countries, the question now is how to ensure exports remain resilient. Varma said that some countries outside the US have already reached out to negotiate new bilateral or multilateral trade agreements, seeking new export markets and diversifying their export destinations.

Regarding the direction of trade flows, some effects are already apparent. Varma said that tariffs will alter the direction of trade and investment flows. By 2025, tariff differences within Asia became a significant driver of transshipment exports. Many Southeast Asian countries have strong exports, and some goods are transshipped to the US through Southeast Asia. With exports to the US facing obstacles, many South Korean automakers are attempting to enter the European market, which helps alleviate performance pressure.