Morgan Stanley Fixed-Asia EM Equity Strategy US Election and 2025 Policy Playboo...-110429027

MAsia Pacific InsightAsia EM Equity StrategyUS Election and 2025 Policy PlaybookMorgan Stanley Asia (Singapore) Pte.+Daniel K BlakeEquity Strategist Daniel.Blake@morganstanley.com +65 6834-6597 Jonathan F GarnerEquity Strategist Jonathan.Garner@morganstanley.com +65 6834-8172 Kristal JiEquity Strategist Kristal.Ji@morganstanley.com +65 6834-6949 Morgan Stanley Asia Limited+Tim Chan, CFAEquity Strategist Tim.Chan@morganstanley.com +852 3963-4568 Laura WangEquity Strategist Laura.Wang@morganstanley.com +852 2848-6853 Morgan Stanley & Co. LLCAriana SalvatoreStrategist Ariana.Salvatore@morganstanley.com Morgan Stanley & Co. International plc, Seoul Branch+Joon SeokEquity Analyst Joon.Seok@morganstanley.com +82 2 399-4934 Morgan Stanley México, Casa de Bolsa, S.A. de C.V.+Nikolaj LippmannEquity Strategist Nikolaj.Lippmann@morganstanley.com +1 212 761-2463 Morgan Stanley MUFG Securities Co., Ltd.+Sho NakazawaEquity Strategist Sho.Nakazawa@morganstanleymufg.com +81 3 6836-8926 Morgan Stanley & Co. LLCMichael D Zezas, CFAStrategist Michael.Zezas@morganstanley.com +1 212 761-8609 We identify stock impacts from US policy scenarios affecting tariffs, US-China relations, climate policy and the macro outlook, utilising an analyst survey of 486 companies (US$10trn MC). Asia/EM equities are more challenged by outcomes that increase risk of tariffs and IRA repeal. US policy path up for debate: A year of ballot-related volatility will be capped by US elections on 5 November. Our US Public Policy team has laid out policy scenarios in US Public Policy: Navigating a Noisy Election, and our EM Macro Strategy team has analysed potential impacts for FX and rates across our universe (see US Election Implications for EM). In short, they see upside risks to USD and rates under a Republican policy platform. New insights on Asia/EM exposure: We build on this with a new survey of our analysts across US$10trn of market cap coverage to unpack the potential impacts of key policies choices for trade, tariffs, and climate. We see these as negative on balance for Asia/EM equities, with policy risks most concentrated in China, Taiwan and Korea. Overall, we highlight stocks that may benefit or face challenges from policies that result from a Republican win in Exhibit 10 and Exhibit 13 . Tariffs and US-China Policy – De-risking vs Broader Decoupling: The Biden/Harris Administration has argued for a 'narrow yard, high fence' approach, which is likely to broaden further as technology diffuses across industries, but the process has generally allowed for transition periods. Former President Trump has argued in his campaign for a further use of tariffs (including potentially up to 60% on China), and may also be less predictable with sanctions and investment restrictions. We screen for the most impacted stocks in Policy- and Theme-Specific Screens . Climate/EV Policy – Rollout vs Partial Repeal: Current administration policies have reinvigorated inves