Investment Strategies
Spotlight On Asia After US Tariff Hike – Cambridge Associates

After US President Donald Trump imposed significant tariffs on imports to the US, global investment firm Cambridge Associates has just released its latest Asia report, analysing investment implications in the context of the current macroeconomic environment. Â
Aaron Costello, head of Asia, and Vivian Gan, investment director, capital markets research at Cambridge Associates, highlighted how Asian and global market volatility surged in early 2025 as US tariffs triggered global growth fears.
Given the export-oriented nature of most Asian economies and their sensitivity to global growth and demand, the region may bear the brunt of US tariffs. “As such, Asia market volatility is likely to persist in the near term, particularly since US trade policy can shift abruptly,” Costello and Gan said in a note.
With the United States and China locked in a tariff standoff, at least for now, a key question is to what extent China and other Asian economies will increase fiscal and monetary stimulus to offset the economic impact from US tariffs. “Aggressive stimulus, particularly from China, may help to support growth and sentiments in Asia more broadly,” they continued.
Considering the current environment of higher uncertainty and volatility, as well as global equity market concentration in US large-cap technology stocks, Costello and Gan view portfolio diversification as key to managing downside risks. They favour strategies that are more attractively priced, are less correlated to the broader market, or are able to capitalise on any dislocations that may result from economic stress.
In an uncertain environment, US asset manager PineBridge Investments also thinks that investors need to be more diversified across asset classes, industries, and global geographies. The firm tilts towards emerging market and European assets, saying that US assets are losing their shine.
Asset allocation
Within public equities, Costello and Gan believe that Asia
ex Japan value-oriented strategies could add a layer of downside
protection, given less demanding starting valuations and a
differentiated sector exposure that is less concentrated in
technology.
Across hedge funds, Costello and Gan think that Asia event-driven strategies warrant a second look, in view of an improved manager competitive landscape and a current macro environment that is supportive of alpha generation. Event-driven strategies also tend to be less correlated to broader equity markets, and therefore could serve as a diversifying strategy amid current market volatility.
Within private investments, they remain constructive on Japanese buyouts,given strong underlying supply and demand fundamentals. “Deal flow is likely to remain robust as Japan’s ageing demographics and ongoing corporate governance reforms continue to drive corporate actions,” they said. It may be further accelerated by dislocations created by US tariffs. Meanwhile, attractive entry valuations today and the availability of cheaper leverage lend support to continued capital inflows.
For real assets, Costello and Gan see increased opportunities in Asia-Pacific value-added and opportunistic infrastructure, bearing in mind the region’s maturing regulatory environment and longer-term demand for infrastructure spending. They are positive on data centres and renewable energy infrastructure, which are backed by strong fundamental demands while also less sensitive to potential growth and trade shocks.