Asian goods export volumes, in seasonally adjusted terms, remained close to their July peak in August, reflecting exporter price concessions, delays in US tariff implementation, and robust electronics demand, according to Oxford Economics.
Oxford Economics, however, expects this resilience to moderate over the coming months.
More sectoral tariffs, including on pharma products, have added to headwinds, it said. Carve-outs for selected products and active US-based manufacturing are expected to soften the effective tariff burden, though a bigger risk remains the threatened tariff increases on semiconductors.
“We estimate that Asian exports dropped back in August, contracting by 1.8 percent month-on-month in seasonally adjusted U.S. dollar terms after July’s 2.2 percent expansion,” Oxford Economics said.
“Excluding Taiwan, export momentum lost steam everywhere. This was most acute in shipment from South and Southeast Asian economies, which fell by 5.0 percent m/m sa,” it said.
After adjusting for price effects, export volumes for the region edged down by 0.1 percent m/m sa in August, a touch under July’s peak.
This suggests that Asian exporters, especially Japan, South Korea and China, are reducing prices to maintain competitiveness, it said. Machinery and electronics remain the most affected by US tariffs based on product type.
Sectors with elevated tariffs like metals and autos consistently surpass expectations, possibly due to price declines and limited exposure to US markets in non-electronics sectors.
Oxford Economics expects any remaining resilience to diminish soon. A 100-percent tariff on patented pharmaceuticals, alongside a 25-percent tariff on trucks and 30-percent tariff on furniture, takes effect on Oct. 1, 2025.
Singapore is most at risk in Asia since its pharmaceutical production is oriented towards patented or innovator drugs, Oxford Economics said. Other key pharma producers such as Japan, South Korea, and India are more shielded due to trade deal safeguards and a specialization in generic pharma products that are not subjected to the tariff.
The bigger risk to the broader region remains the potential tariff hikes on exempted semiconductors as Asia exports much of these to the US, it said.
Oxford Economics said that in the near term, the hit from tariff hikes is likely to be felt gradually. The anticipation of higher tariffs, festive spending season and AI-linked demand could continue to support electronic exports.
Lags in implementation of higher tariffs by the US Customs imply a delayed impact on demand from US businesses and consumers.
However, payback from earlier frontloading would naturally weigh on exports. Export price concessions to sustain volumes are unlikely to persist, as manufacturers have limited scope to absorb further margin compression, it said.
