US Trade War Carries Risks for Sri Lanka, Many APAC Sovereign Ratings

Fitch Ratings-Hong Kong-15 April 2025: Increases in US tariffs will weigh on the credit metrics of many sovereigns in the Asia-Pacific (APAC) and risks will rise if higher country-specific tariffs are eventually implemented, says Fitch Ratings.

APAC’s high trade openness and exposure to US demand leave it particularly exposed to US tariff risks. In China (A/Stable), Vietnam (BB+/Stable), Taiwan (AA/Stable), Thailand (BBB+/Stable) and Korea (AA-/Stable), for example, manufacturing exports and investments are an important driver of economic growth and the US is a major export market. The 10% tariffs imposed on most countries globally are below the 15% that Fitch had assumed in our March Global Economic Outlook, while the effective tariff rates on China are higher than we expected…| read more on Fitch Ratings