Deutsche Bank-Asia Macro Insight Growth at Risk Navigating Tariff Wall-117365399

T2se3r0Ot6kwoPaT2se3r0Ot6kwoPaDistributed on: 20/08/2025 22:12:06 GMTDistributed on: 20/08/2025 22:12:06 GMT21 August 2025Deutsche BankResearch Asia Economics Asia Macro Insight Date Central banks across Asia have maintained their easing bias, looking past the positive surprises in Q2 GDP and expecting a growth correction in the second half of the year as export front-loading reverses in response to higher US tariffs. Our model (Figure 1) suggests that export growth deviation in Q2 may be significant, led in part by ASEAN, thereby hinting at a significant payback in exports in the second half of 2025.The anticipated export decline may exceed a simple correction—becoming deeper and longer than our forecast—especially given our assumption of a mere soft patch in G2 growth, as per our US and European analysts' outlook. There is also the matter of pending semiconductor and pharmaceutical tariffs and the potential 40% tariff on transshipments of Chinese goods, with details remaining unclear as US-China negotiations continue through November, while US-India relations have worsened.Figure 1: Asia-8 export deviation...-20-10010203008101214161820222426Asia-8Fitted/Forecast%yoySource : CEIC, Deutsche Bank ResearchFigure 2: ...led by ASEAN5%8%10%13%15%010203040501819202122232425US imports from ASEAN (USD bn)ASEAN Share (rhs)Source : CEIC, Deutsche Bank ResearchOverview ………………………….….....…..1China…........................................................3Hong Kong…...............................................7India….........................................................9Indonesia…...............................................13Malaysia…................................................15Philippines….............................................16Singapore…..............................................18South Korea..............................................19Sri Lanka...................................................21Taiwan……...............................................22Thailand….................................................24Vietnam….................................................26DB Macro Forecasts.................................28Growth & Inflation Heatmap……............30EM Asia Macro Charts….........................31EM Asia Monetary Policy Monitor….......33Juliana LeeChief Economist+65-6423-5203Kaushik DasChief Economist+91-22-7180 4909Yi Xiong, Ph.D.Chief Economist+852-2203 6139Junjie HuangEconomist+65-6423-6699Deyun OuEconomist+852-2203 6166Deutsche Bank AG/SingaporeIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.Growth at Risk: Navigating Tariff Wall 21 August 2025Asia Macro InsightPage 2Deutsche Bank AG/SingaporeThe US tariff shock arrives as several economies already contend with significant competitive pressure from Chinese producers, both for global market share and with