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UBS APAC Technology Report Summary: America First Trade Policy

Key Context

Following Donald Trump's inauguration and emphasis on trade policies, UBS analyzed the potential impacts on Asian technology exporters under the "America First" trade policy framework.

UBS View on Trade Policy

• UBS anticipates initial short-term relief with no immediate implementation of tariffs, though studies are ongoing.
• Full implementation could trigger significant economic challenges, including a 1 percentage point reduction in global GDP and a 30 basis point increase in inflation for 2026.

Impact on Asian Tech

• The US and China are central to tech trade, accounting for ~35% of tech units and ~50% of tech revenue globally.
• Consumer technology faces higher risks under broad tariff scenarios, with significant exposure from US-China trade dynamics.
• Specific risks include higher import costs for retailers like Best Buy, and potential disruptions in PC and iPhone supply chains due to reliance on Chinese manufacturing.

Sector-Specific Implications

• Cloud Services and AI: Relatively protected due to minimal direct export impact and focus on innovation rather than consumer goods.
• Consumption Tech: Vulnerable to tariffs, affecting smartphones, PCs, and other discretionary products.
• Production Shifts: Risk of production relocation for components like iPhones, taking time to adapt.
• Economic Downturn: Full trade war could lead to a global recession, offsetting any initial benefits from tariff policy.

Downside Scenario

A complete implementation of 60%/10% tariffs could lower global GDP by 1 percentage point and US GDP by unspecified but notable levels, depending on trade targets and timelines.

Overall, UBS cautions that while there is initial relief, the long-term risks from aggressive tariffs could dampen growth and impact tech investment.