US tariffs drag on growth prospects for Asian cities
Cities and regions where we expect the largest downgrades to GDP growth over 2025–2026 are those with higher concentrations of economic activity in export manufacturing.
The impact on APAC’s cities and regions is likely to be varied. In general, cities and regions where we expect the largest downgrades to GDP growth over 2025–2026 are those with higher concentrations of economic activity in export manufacturing—especially those facing targeted US tariffs and those vulnerable to the second-round effects of lower global demand. Lower global trade and industrial activity will also affect regional logistics and transport hubs.
The largest downgrades in our forecasts are found among the tech producers on China’s east coast, where US-bound export manufacturing comprises a large proportion of economic activity. This includes Shenzhen, Hangzhou, and Shanghai.
Although some countries are currently subject to much smaller US tariff measures, they will still be affected by lower US demand and will also be exposed to the second-round effects of lower demand globally, particularly from a slower growing China. This includes the manufacturing hubs across southeast Asia as well as Western Australia, which relies heavily on Chinese demand for intermediate inputs. As a major global shipping hub, Singapore’s GDP growth outlook has also dimmed significantly. In contrast, we expect to see shallower downgrades in cities less reliant on trade-related manufacturing and with more service-oriented economies.
