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US-China Tariffs Hit 137%: The Employer Risk Expats in Asia Can't Ignore

Q: Should expats in Singapore worry about this?

Singapore's economy is highly trade-dependent. Financial services and logistics firms are already seeing reduced China-US transaction volumes. Expats in these sectors should monitor their employer's exposure.

Q: What is the safest investment structure for expats during a trade war?

Diversification across geography and asset class, use of tax-efficient wrappers like Irish-domiciled UCITS, adequate liquidity in accessible jurisdictions, and separation of your income risk from your investment risk.

Investment

April 06, 2026

Tariffs on Chinese goods entering the US reached 137% in April 2026. Bilateral trade between the two largest economies has fallen approximately 30%. China responded by posting a record $1.2 trillion trade surplus, redirecting exports globally. If you are an expat in Southeast Asia working for a company with any exposure to China-US supply chains, this is not a trade policy headline. It is a direct risk to your employer's revenue and your income stability.

Key Takeaways

US-China tariffs at 137% have compressed bilateral trade by 30%, creating employer risk for expats at firms dependent on China supply chains across Southeast Asia.
China's record $1.2 trillion trade surplus is redirecting goods globally, increasing competition for Southeast Asian manufacturers and exporters.
The dollar is weakening against most Asian currencies as trade policy uncertainty grows, affecting expat purchasing power in both directions.
Expats should assess their employer's China exposure and ensure their financial structure does not concentrate income risk and investment risk in the same region.

How Did US-China Tariffs Reach 137%?

The 137% tariff rate is the cumulative result of escalating rounds of US tariffs on Chinese goods throughout 2025 and into 2026. The Trump administration layered sector-specific tariffs on top of existing duties, with each round targeting a broader range of products. The April 2026 level represents the effective weighted rate across most Chinese manufactured goods entering the US.

The impact is measurable. US-China bilateral trade has declined approximately 30% from its pre-escalation baseline. Chinese exporters have not absorbed this loss quietly. Beijing redirected trade flows globally, with Chinese goods now flooding Southeast Asian, Middle Eastern, and European markets at competitive prices. China posted a record $1.2 trillion annual trade surplus, the largest in modern history.

For expats in the region, the second-order effects matter more than the tariff number itself. Your employer may not trade directly with China. But if your employer competes with Chinese manufacturers, sources components from Chinese suppliers, or sells into markets where Chinese goods are now being dumped at lower prices, the tariff war is reshaping your employer's competitive position.

Why Does This Create Employer Risk for Expats in Southeast Asia?

Southeast Asia sits at the intersection of the US-China trade war, and expats working in manufacturing, logistics, technology, and financial services are exposed to employer risk they may not have priced in. The region has absorbed a significant share of supply chain relocation from China over the past three years. Vietnam, Thailand, Malaysia, and Indonesia have all benefited from companies diversifying away from Chinese production.

That diversification is now being tested. Chinese exporters, locked out of the US market at 137% tariffs, are redirecting goods into the same Southeast Asian markets. Local manufacturers face price competition from Chinese products that are being sold below pre-tariff pricing to maintain volume. An expat working for a Malaysian electronics manufacturer or a Thai auto parts supplier is watching their employer's margins compress in real time.

Which Sectors Are Most Exposed?

Electronics, semiconductors, automotive components, industrial machinery, and consumer goods face the most direct pressure. Malaysia's electrical and electronics sector, which accounts for approximately 38% of the country's exports, competes directly with Chinese alternatives. Singapore's role as a regional trading hub means financial services and logistics firms feel the volume decline. Thailand's automotive sector is exposed to both Chinese competition and reduced demand from US buyers.

What About Tech and Banking?

Technology firms with cross-border operations face compliance complexity as both the US and China tighten export controls and data regulations. Banks and financial institutions servicing trade finance are seeing transaction volumes decline. If your compensation includes performance bonuses tied to revenue or deal flow, the trade war is already in your pay packet.

How Is the Trade War Affecting Currencies That Expats Depend On?

The dollar has weakened against most Asian currencies as trade policy uncertainty erodes confidence in US growth prospects. The USD/MYR rate has moved from 4.51 to approximately 4.03 over the past 12 months, a roughly 9% appreciation for the ringgit. The EUR/USD sits at 1.151 and GBP/USD at approximately 1.320.

For expats earning in USD, every month of dollar weakness means your salary buys less in local currency terms. If you are based in Kuala Lumpur earning in USD and spending in MYR, your effective purchasing power has declined nearly 10% in a year without any change to your nominal salary.

The flip side exists too. Expats earning in MYR or SGD and holding GBP or EUR obligations back home (mortgages, school fees, family support) are benefiting from stronger local currencies against the dollar. But the currency story is more complex than a single pair. A German expat in Singapore earning SGD, with a EUR mortgage and USD-denominated investments, is running three currency exposures simultaneously, each moving on different drivers.

Should Expats Reassess Their Financial Structure Given the Trade War?

Yes, particularly if your income and your investments are concentrated in the same region or sector. The most dangerous position for any expat is correlated risk: your salary depends on the same economic forces as your portfolio. If you work in Malaysian manufacturing and your investments are concentrated in Asian equities, a trade war that hits your employer also hits your savings.

The structural fix is straightforward in principle. Diversify across geography, currency, and asset class so that a single macro shock does not compress your income and your wealth simultaneously. Irish-domiciled UCITS ETFs provide access to global markets without US estate tax exposure. A portfolio split across US, European, and emerging market equities with a bond allocation and gold position is structurally more resilient than one concentrated in the region where you earn your living.

What About Cash and Short-Duration Positions?

With the Fed holding rates at 3.50-3.75% and only one cut expected for 2026, USD cash and short-duration instruments still yield reasonably. If you are accumulating cash while waiting for clarity on the trade situation, parking it in a money market fund or short-term bond ETF preserves optionality. Doing nothing with surplus cash, letting it sit in a zero-interest current account, is itself a decision with a cost.

What Happens if Beijing and Washington Strike a Deal?

A deal would move markets materially, but the structural damage from 137% tariffs is not reversed overnight. Beijing is reportedly positioning for a potential Trump visit as leverage in trade negotiations. If a summit materialises in April, USD, CNH, and regional equity markets would react sharply.

Expats should not position their portfolios around a deal prediction. The history of US-China trade negotiations is a history of announcements followed by reversals. The correct approach is to build a structure that performs adequately whether tariffs stay, escalate, or partially unwind. That means avoiding concentration, maintaining liquidity, and ensuring your investment wrapper (SIPP, offshore bond, brokerage account) is portable across jurisdictions.

The $1.2 trillion Chinese trade surplus is redirecting goods and capital flows globally. Southeast Asia is absorbing a disproportionate share. Whether your employer benefits from supply chain relocation or suffers from Chinese competition depends on the specific sector and firm. Your financial structure should not depend on that answer going one way. It should be built to absorb either outcome.

Frequently Asked Questions

Q: How do I know if my employer is exposed to US-China tariffs?
A: Check whether your company sources components from China, exports to the US, or competes with Chinese manufacturers in your market. Annual reports and investor presentations typically disclose supply chain geography. If you work in electronics, automotive, industrial, or consumer goods in Southeast Asia, some exposure is almost certain.

Q: Will the tariffs come down if there is a trade deal?
A: Possibly, but history suggests partial rollbacks rather than full reversals. Even under optimistic scenarios, tariff rates are unlikely to return to pre-2025 levels. Companies and investors should plan for a structurally higher tariff environment between the US and China.

Q: How does the trade war affect my investment portfolio?
A: The primary risk is concentration. If your portfolio is weighted toward Asian equities or sectors directly exposed to trade flows (tech, manufacturing, logistics), the trade war creates correlated downside risk with your employment income. Diversifying across geographies and asset classes reduces this exposure.

Q: Should expats in Singapore worry about this?
A: Singapore's economy is highly trade-dependent. The MTI upgraded 2026 GDP growth to 2.0-4.0%, but this forecast assumes trade stabilisation. Financial services and logistics firms are already seeing reduced China-US transaction volumes. Expats in these sectors should monitor their employer's exposure.

Q: Is the strong MYR good or bad for expats?
A: It depends on your currency flows. If you earn in MYR and have GBP or EUR obligations, a strong ringgit helps. If you earn in USD and spend in MYR, your purchasing power is declining. The key is to understand your full currency exposure map and manage it deliberately rather than discovering it during a crisis.

Q: What is the safest investment structure for expats during a trade war?
A: There is no single "safe" structure, but the principles are consistent: diversification across geography and asset class, use of tax-efficient wrappers like Irish-domiciled UCITS, adequate liquidity in accessible jurisdictions, and separation of your income risk from your investment risk. A structured review with a cross-border specialist is the most efficient way to identify gaps.