More than six months after President Trump’s Liberation Day tariffs, Asian firms have adapted and stabilised to the new trading environment. Companies in the region are less worried about supply chain disruption impacting revenue and have begun trading with different partners in the region in a change of tact that is supporting growth.
So finds HSBC in its latest Global Trade Pulse that drew on insights from 6,750 decision-makers at businesses with international operations. The survey was conducted in October across 17 markets, eight of which are in Asia.
“Our research data suggest that companies in Asia are adapting to the new environment,” says Aditya Gahlaut, Regional Head of Global Trade Solutions, Asia at HSBC. “Though their concerns around revenue have eased slightly, they remain alert to risks. Tariff uncertainty has galvanised Asia, while a growing sense of certainty is enabling companies across the region to make more informed decisions and plan ahead.”
The research finds that two in three (68%) Asian firms feel more certain about the impact of trade policy than they did six months ago, while more than three in four (76%) say they can manage the impact of recent trade-policy changes.
Still, corporates in the region have been busy pulling treasury levers to make things easier. Most Asian firms (62%) responded that they have experienced increased working-capital pressure since 2024 as well as increased reliance on short-term financing like revolving credit facilities or supply chain financing to address working capital needs. Nearly three quarters of corporate respondents in the region have sought out additional funding from alternative sources like private capital, trade credit, or non-traditional lenders. Rolling out new technologies or process efficiencies to optimise working capital needs has also been a priority.
Banks have and will become more central to corporate decision-making in light of trade-related volatility. Eighty nine percent of Asian firms responded that banks’ importance have risen as cross-border complexity increases. Strategic advice on international expansion is the top form of support sought from banks, followed closely by risk management tools, and support with business resilience like scenario modelling, continuity planning, and cash flow forecasting.
Although Asian firms anticipate an increase in costs from trade uncertainty in the next two years, fewer firms than last year predict revenue loss although they are rethinking long-term business models and holding back from investing internationally.
A new focus on Asia
Gahlaut argues that as the tariff landscape becomes clearer, a new trade map is shaping up defined by Asian firms dialling up trade strategies focused on Asia.
“Asia for Asia is no longer a slogan: it is borne out by the fact that the Asia Pacific region is home to the world’s largest free-trade agreement, the Regional Comprehensive Economic Partnership (RCEP). What’s more, Asia’s growing consumer market, its thriving digital economy, and deeply rooted supply network make the region an appealing target not only for Asia firms but for companies worldwide,” he says.
The RCEP covers 15 economies and a combined GDP of over 30%. It’s harmonised trade rules reduce friction, create deeper liquidity pools and more cross-border investment opportunities across the region. RCEP and other Free Trade Agreements like Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)CPTPP, are expected to eliminate or greatly reduce import levies on 90% or more of goods traded between their members over the coming years.
Under the RCEP, a single set of rules and procedures applies to goods originating in any member economy, which means goods made from resources exported from one country can benefit from preferential tariffs when processed in a second RCEP country and exported to a third, explains Gahlaut.
In a reflection of its emerging impact, the survey finds 41% of Asian firms plan to increase their reliance on Southeast Asia; 34% plan to increase reliance on East and North Asia and 29% plan to increase reliance on South Asia – 30% of Asian firms also plan to increase reliance on Europe.
Well over a quarter of Asian businesses’ respondents said they have already entered new markets while one in two respondents said they are planning to enter new markets less affected by trade disruption. Some of the recent free-trade deals are also compensating like India-UK and India-European Free Trade Association. The survey also found the number of firms with a “positive outlook” over the next two years has risen and spread to countries like Malaysia and Vietnam.
