"Backed by demand from the US and Europe, exports have once again seen an uptick from Asian countries. With the US President Trump focusing on pushing up US jobs by reducing imports, Asian exporters are in a state of flux about the fortunes of their business. Of the 16 countries facing scrutiny from Trump’s 90-day review of possible ‘trade abuse’, more than half are in Asia with the biggest bilateral trade surpluses chalked up in the region by China, Japan, Vietnam and South Korea. China was the largest at $327 billion in 2016."

Backed by demand from the US and Europe, exports have once again seen an uptick from Asian countries. With the US President Trump focusing on pushing up US jobs by reducing imports, Asian exporters are in a state of flux about the fortunes of their business. Of the 16 countries facing scrutiny from Trump’s 90-day review of possible ‘trade abuse’, more than half are in Asia with the biggest bilateral trade surpluses chalked up in the region by China, Japan, Vietnam and South Korea. China was the largest at $327 billion in 2016. Looking at the prevailing situation, Rob Subbaraman, Chief Economist for Asia ex-Japan at Nomura in Singapore says this is going to be a bigger issue next year than this year, especially between the US and China.

Sudhir Dhingra, founder of Orient Craft, has seen a substantial rise in export volumes to $181 million in 2016 from $129 million in 2012. But owing to a unstable political and economical scenario such as Brexit and Trump’s focus on curbing imports, Dhingra expects countries to pursue simpler bilateral deals than grand regional free trade agreements as politicians realise bringing jobs back home to high-cost labour markets isn’t so simple. There is a growing concern that the US might impose additional duties.

Current growth pattern

Giving signs of positive growth, Parag Khanna, a senior research fellow at the Lee Kuan Yew School of Public Policy at the National University of Singapore says the US services exports to Asia are rising and a burgeoning middle class in Asia offers huge potential. American exports to South Korea rose to a record in February and the nation’s year-to-date deficit with China has fallen by 2.5 per cent. That emerging demand could be the start of a trend. Asian economies are not just about manufacturing or commodities anymore. There is a strong services and consumption vertical emerging.

In IMF’s annual outlook released recently, Asia will grow 5.5 per cent in 2017 compared to 5.3 per cent last year, though it warned that downside risks could include rising trade barriers. Other worries include signs that China’s economy may be slowing as authorities clamp down on excessive credit, meaning demand for commodities will soften and hurt producers such as Australia and Indonesia. Exports from China, the world’s biggest trading nation, held up in April after hitting a two-year high in March. South Korea’s exports expanded for a sixth month in April, contributing to the biggest trade surplus in decades. Japanese exports grew at the fastest rate in more than two years in March. India’s merchandise export growth was up 4.7 per cent in the fiscal year ending March 2017, after a drop of 16 per cent in the previous fiscal year. India is now poised for a year of accelerating trade growth, according to Bloomberg Intelligence.