Fitch Ratings mentioned on Wednesday that while it had previously anticipated that most of the banking systems in the Asia-Pacific region would have "broadly stable operating conditions" in 2025, the introduction of tariffs shook things up.
"Our current Neutral outlooks for the Korean, Taiwanese and Thai banking sectors in 2025 could move to Deteriorating if there are substantial further increases in US tariffs beyond the 10% tariff imposed on all US trade partners on 2 April, or if the hit to their economic growth is more severe than we had expected," Fitch said, adding that all of this will depend on the final tariff outcomes when negotiations conclude.
For China and Hong Kong, higher tariffs would "reinforce" Fitch's "Deteriorating" banking sector outlooks. Should the trade wars be more serious than anticipated, Vietnam's "Improving" forecast could be lowered to "Neutral."
