1. Republicans win: The US presidential election outcome is a resounding vote in favour of the policies proposed by Donald Trump, the new president-elect. Voter concerns about inflation and immigration also played a role in his success. The implications of the election outcome for emerging markets (EMs), particularly China, are significant. The president-elect has proposed a 10% tariff on all imports, and tariffs potentially as high as 60% on Chinese imports.

2. Battery packs and automobiles: There is a clear risk that the US Inflation Reduction Act (IRA) will be repealed, with negative implications for South Korean automobile and battery exporters. While US imports of electric vehicles are low, the battery packs used in domestically produced vehicles are mostly imported from Asia. Mexican auto imports into the United States are also at risk from higher tariffs. The Mexican and US auto-supply chains are closely linked, with the United States sourcing 25% of auto imports from the country. For investors, the impact of higher tariffs on US import prices—and in turn household purchasing power—is a clear concern.

3. South Korean rate cuts: In South Korea, the central bank reduced interest rates for the first time since May 2020. The country also registered a third-quarter gross domestic product (GDP) growth of 0.1%, rebounding from a 0.2% contraction from the second quarter. Taiwanese equities bucked the trend and rose. Taipei-listed shares of the world’s largest contract chipmaker posted forecast-beating third-quarter earnings and a positive outlook.

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