Market Overview: U.S. 10% Tariff Implementation Can Be Balanced by Currency Movements

According to Maybank Investment Banking Group economist Erica Tay, the impact of the additional 10% tariff on Chinese goods entering the U.S. is likely to be manageable compared to the previously threatened 60% tariff.

"While the tariff may somewhat reduce China's export growth, this effect could be balanced out by currency movements or absorbed by importing firms," Tay stated, linking Trump's 10% tariff to Beijing's failure to fulfill its promise to curb the entry of fentanyl into the U.S. She noted that if China increases its sanctions against the illegal drug trade, this tariff could be withdrawn.

Tay also emphasized that Chinese stocks could respond with some relief, "at least for now."