US Trade Policy Uncertainty Clouds Asian Growth Prospects

Uncertainty around US trade policy, especially tariffs, could undermine business confidence in Asia and impact growth negatively. Moody's predicts that economies like India might initially benefit but long-term investment shifts will take years. The pause on tariffs provides temporary relief, yet underlying risks persist.

Uncertainty surrounding US trade policies threatens to undermine business confidence and consumer sentiment in Asian nations, including India, affecting their growth prospects, according to Moody's Ratings.

A recent three-month postponement by US President Donald Trump on imposing reciprocal tariffs—excluding China—has provided temporary relief. However, ongoing tariff duties and trade tensions continue to be a significant concern for Asian economies.

Moody's Senior VP, Nicky Dang, warns that the escalation in US-China tensions could impair the region's growth, and uncertainties in trade policies will persist, leading to potential risks for business and consumer confidence.

(With inputs from agencies.)