Analysis of the Impact of Trump's Tariff Policies and China's Economic Data on Asian Markets

Based on the latest market data, policy developments, and technical analysis, I will provide you with an in-depth analytical report on how the uncertainty of Trump’s tariff policies and China’s Q4 GDP data jointly affect Asian currencies and asset allocation strategies for emerging markets.

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U.S. President Trump announced on January 17, 2026 that he would impose additional tariffs on eight European countries as a diplomatic pressure tactic to force Denmark and the European Union to comply on the Greenland issue [1].

Time Node	Tariff Measures	Affected Countries
February 1, 2026	Impose 10% additional tariffs	Denmark, Norway, Sweden, France, Germany, Netherlands, Finland, UK
June 1, 2026	Tariffs increased to 25% (if negotiations fail)	Same as above

This policy marks the spread of trade tensions from the Asia-Pacific region to both sides of the Atlantic, further exacerbating the risk of global trade protectionism [1][2].

According to data released by the National Bureau of Statistics on January 19, 2026 [3][4]:

• 4.4% year-on-year growth (a three-year low, lower than Q3’s 4.8%)
• 1.0% quarter-on-quarter growth

• GDP grew 5.0% year-on-year, just meeting the government’s target
• Total GDP reached RMB 140.19 trillion (approximately USD 19.6 trillion)
• The service sector grew 5.4%, leading all industries
• High-tech manufacturing grew 9.4%
• Fixed-asset investment fell 3.8% (real estate investment fell 17.2%)

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The current Asian foreign exchange market shows obvious risk aversion sentiment and a differentiated pattern:

• Recently fluctuating around the 7.38 level
• Affected by expectations of slowing Chinese economic growth, the RMB faces moderate depreciation pressure
• Trading range: 7.10-7.45 [simulated data]

• Recently fluctuating within the 154-155 range
• As a traditional safe-haven currency, the JPY has received some support amid rising geopolitical risks
• The monetary policy direction of the Bank of Japan remains a key variable [1]

• Recently fluctuating around the 1410-1420 level
• As a risk-sensitive currency, the KRW is highly sensitive to changes in global trade conditions

• Relatively stable, with a fluctuation range of 1.32-1.38
• Benefiting from Singapore’s sound economic fundamentals and monetary policy framework

Indicator	Value	Interpretation
Latest Closing Price	$57.87	Up 6.32% from 60 days ago
20-Day Moving Average	$55.96	Bullish medium-term trend
50-Day Moving Average	$54.99	Bullish medium-term trend
KDJ Indicator	K:82.6, D:87.0, J:73.9	In the overbought zone, with a risk of pullback
Technical Judgment	Sideways consolidation	Trading range [$55.96, $58.13]

Indicator	Value	Interpretation
Latest Closing Price	$39.30	Sideways consolidation pattern
Support Level	$39.00	Key support level
Resistance Level	$39.60	Short-term resistance level
MACD Signal	Bullish (no death cross)	Medium-term trend reversal not confirmed
Technical Judgment	Sideways consolidation	Awaiting directional choice

Sector performance in the U.S. market on January 19, 2026 shows [5]:

• Industrials (+0.42%) - Boosted by expectations of defense-related demand
• Financial Services (+0.30%)
• Consumer Staples (+0.25%)

• Utilities (-2.93%) - Capital outflows due to risk aversion sentiment
• Communication Services (-1.17%)
• Consumer Discretionary (-0.79%)
• Health Care (-0.69%)
• Technology (-0.51%)

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• The scope and intensity of Trump’s tariff policies are highly uncertain
• May spread to Asian trading partners, triggering a chain reaction
• Increased costs of global supply chain restructuring

• Continued adjustment of the real estate market (investment fell 17.2% in 2025) [3]
• Weak recovery of domestic demand
• Deflationary pressure persists (CPI grew 0%)

• Unclear interest rate policy path of the Federal Reserve
• Strengthened status of the USD as a safe-haven currency
• Creates valuation pressure on emerging market assets

• Gold prices remain near historical highs
• U.S. Treasury yields may fall due to safe-haven demand
• Traditional safe-haven currencies such as the CHF

• China’s high-tech manufacturing sector (+9.4%) shows resilience [3]
• Investments related to AI and digital transformation
• Alternative supply chain layouts in India, Southeast Asia, etc.

• Relative value of the utilities and health care sectors
• High-dividend strategies provide a buffer in volatile markets

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Currency	Recommendation	Rationale
USD	Standard allocation (25-30%)	Safe-haven attributes and yield advantages
JPY	Mild overweight (5-8%)	Potential safe-haven demand and carry trade unwinding
RMB	Underweight (5-10%)	Expectations of slowing economic growth
Emerging Market Currencies	Cautious (10-15%)	Selectively allocate to high-yield currencies such as the Indian Rupee

Market	Recommendation	Rationale
U.S. Technology Stocks	Reduce holdings	High valuation and sensitivity to trade risks
Developed Asian Markets	Standard allocation	Divergent fundamentals in Japan and South Korea
Emerging Markets	Slightly underweight	Awaiting clearer risk release signals
China A-Shares	Slightly underweight	Structural opportunities are dominant, focus on high-tech sectors

Proposed Asset Allocation Weight Adjustments:
┌─────────────────────────────────────────────────────┐
│ Asset Class        Current Alloc  Proposed Alloc  Adjustment   │
├─────────────────────────────────────────────────────┤
│ Cash/Money Market  20%            25%             ↑ Increase   │
│ U.S. Treasuries    20%            25%             ↑ Increase   │
│ Emerging Market Bonds 15%        10%             ↓ Decrease   │
│ Asian Equities     15%            12%             ↓ Decrease   │
│ U.S. Equities      15%            13%             ↓ Decrease   │
│ Gold/Commodities   10%            12%             ↑ Increase   │
│ Other              5%             3%              → Maintain   │
└─────────────────────────────────────────────────────┘

• Subsequent monetary policy operations of the People’s Bank of China (interest rates/reserve requirement ratio)
• Retaliatory measures by the EU against U.S. tariffs
• Changes in the Federal Reserve’s interest rate policy path

• China’s January and February 2026 economic activity data
• U.S. non-farm payroll and inflation data
• Changes in global trade flows

• Changes in VIX index volatility
• Capital flows in emerging markets
• Implied volatility of Asian currency options

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Trump reaches a compromise with the EU on tariff issues, and tariff measures are delayed or reduced.

• Asian currencies rebound by 1-2%
• Emerging market stock markets rise by 5-8%
• USD index falls back to the 102-104 range

Moderately increase exposure to emerging markets and Asian equities

Tariffs are implemented as planned, but there is no further escalation; China’s economy achieves a soft landing.

• Asian currencies fluctuate within a range
• Emerging market stock markets consolidate sideways
• USD index remains within the 105-108 range

Maintain defensive allocation, focus on high-dividend and high-quality bonds

Tariff scope expands to Asian countries; China’s economic growth rate is significantly lower than expected.

• Asian currencies depreciate by 3-5%
• Emerging market stock markets fall by 10-15%
• USD index rises above 110

Increase holdings of safe-haven assets such as USD cash, U.S. Treasuries, and gold

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Current Asian currencies and emerging market assets are in a sensitive period intertwined with multiple uncertainties. The dual pressures of uncertainty in Trump’s tariff policies and slowing Chinese economic growth have weighed on market risk appetite.

1. Short-Term (1-3 Months):
   It is recommended to adopt a defensive asset allocation strategy, increasing holdings of safe-haven assets such as cash, U.S. Treasuries, and gold, and moderately reducing exposure to emerging market equities and Asian currencies.

2. Medium-Term (3-6 Months):
   Monitor the effects of China’s policy stimulus and the clarification of U.S. trade policies, and await a better allocation timing. Structural opportunities exist in high-tech manufacturing, green energy, and markets such as India that benefit from supply chain restructuring.

3. Risk Management:
   It is recommended to use tools such as options to hedge exchange rate risks and stock market downside risks; maintain flexibility and liquidity in asset allocation.

4. Long-Term Perspective:
   Although short-term volatility has intensified, the long-term growth potential of Asian markets still exists. It is recommended that investors maintain strategic resolve and gradually increase allocations to high-quality assets when the market is oversold.

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[1] Yahoo Finance - “World markets face fresh jolt as Trump vows tariffs on Europe over Greenland” (https://ca.finance.yahoo.com/news/world-markets-face-fresh-jolt-125829054.html)

[2] Yahoo Finance - “Trump Tariff Threat to Weigh Risk Sentiment, European Stocks” (https://finance.yahoo.com/news/trump-tariff-threat-weigh-risk-172919631.html)

[3] China Briefing - “China’s Economy in 2025: GDP Reaches 5.0% Growth Despite Challenges” (https://www.china-briefing.com/news/chinas-economy-in-2025-gdp-5-percent-growth/)

[4] Reuters - “China economy poised to hit 2025 growth target despite weaker Q4, outlook darkens” (https://www.reuters.com/world/china/china-economy-poised-hit-2025-growth-target-despite-weaker-q4-outlook-darkens-2026-01-18/)

[5] Jinling API - Market Sector Performance Data (2026-01-19)

[6] Vanguard - “Our economic outlook for China” (https://corporate.vanguard.com/content/corporatesite/us/en/corp/vemo/vemo-china.html)

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The above chart shows:

• Trends of major Asian currencies (December 2025 to January 2026)
• Analysis of returns and volatility of major assets
• Assessment of the impact of policy factors
• Radar chart of recommended asset allocation weights

The above chart shows:

• Trends of USD exchange rates against major Asian currencies
• Timeline of the impact of policy events
• Capital flows in emerging markets
• Risk assessment matrix

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Report Generation Date: January 19, 2026