The chemical sectors of cars and steel in Asia face pressure from the US tariff policies: Moody’s

Moody classifications said in a report on March 17 that companies in the auto, steel, chemical and business services sectors in South and Southeast Asia are facing significant exposure to advanced American policies, including high tariffs that can increase costs and reduce demand.

In contrast, industries such as mining, oil, gas, shipping and investment holding companies and agriculture are less vulnerable to these commercial measures, thanks to strong local operations, various supply chains, or direct American operations.

Suppliers will be hit in automatic parts and luxury car makers who sell to the United States-both directly or through Canada and Mexico-with definitions. However, the extent of the effect depends on the amount of cost they can transfer to consumers. Moody’s, Samvardhana Motheson International Ltd, expects that Samvardhana Motheson International Ltd. Tata Motors, a third of its sales from the United States and can see a decrease in demand if the definitions rise, especially since all JLR cars sold in the United States are produced in the European Union or the United Kingdom – regions that may also face a higher tariff.

Steel and chemical companies will witness the minimum direct effects of the proposed American definitions, but they may suffer from a flow of surplus and petrochemical to Asia, which leads to already high supply and depression. For JSW Steel Ltd, the effect is somewhat determined as its American operations contribute only about 7 % of the revenues. Likewise, the various Upl Corp Ltd processes are expected to help absorb the effect.

Indian information technology companies such as Tata Consultance Services Ltd (TCS) and Infosys Ltd are in a good position to deal with cost pressures from changing American policies, thanks to its strong profit. However, the sector remains exposed to transformations in the rules of American immigration, which may reduce the talent group for companies that depend on foreign workers. To reduce risk, companies such as TCS, Infosys and Hexaware Technologies Ltd. By forming employment in the United States.

At the same time, the escalation of commercial restrictions may slow global growth, which reduces energy demand and the prices of commodity decrease. This can weigh on mining companies and oil and gas companies. You may face the Rellence Industries Ltd. ,, Which are about half of its oil output to the chemical risk of indirect risks of global trade disorders. However, its strong public budget is expected to absorb any declines in demand or profits. The state -owned oil and natural gas company, which mainly serves the Indian market, is still protected from the effects of direct tariffs.

Moodyz added that the sectors such as real estate development, real estate investment funds, communications, and games are largely isolated from American policy attacks, as their business is local in the first place.