“The simplistic methodology the White House has taken to calculate retaliatory tariffs (taking the bilateral trade deficit and dividing it by the countries total US exports) means that Asian countries were hit with higher tariffs,” says Chao in an April 7 note.
Bellwether indices opened in the red across Asia on April 7, the result of the US levying tariffs on some 60 countries and trading blocs. This was further exacerbated by US President Donald Trump’s comments over the weekend, indicating that the reciprocal tariffs are here to stay.
One reason for the outsized move in Asian markets is that their economies have a larger trade orientation, hence the term “Asia export-model”, says David Chao, global market strategist, Asia Pacific (ex-Japan) at Invesco
