KAsset Advises Portfolio Adjustments Amidst Renewed US-China Trade Tensions
BANGKOK, October 11, 2025 – Kasikorn Asset Management (KAsset) is recommending investors shift towards more conservative strategies following escalating trade tensions between the United States and China.The advice comes after former President Trump threatened to impose a 100% tariff on Chinese goods and reportedly cancelled a planned meeting with President Xi Jinping at the APEC forum, sparking fears of a renewed trade war.
Financial markets reacted sharply on the night of October 10, 2025, with investors moving away from riskier assets. The S&P500 closed down 2.7%, the Nasdaq composite fell 3.6%, and the Dow Jones industrial Average dropped 1.9%. The Semiconductor Index (SOX) experienced it’s largest single-day decline in six months, falling 6.3%.
Yields on 10-year US government bonds decreased to approximately 4.05% from 4.14%, while gold prices rose 1.5% to around $4,000 per ounce.The US dollar weakened by 0.6%, and the VIX Index - a measure of market volatility - reached its highest level as April.Oil prices also declined sharply, with WTI closing at $58.3 per barrel (down 5%) and Brent at $58.3 per barrel (down 3.8%).
KAsset anticipates Asian stock markets will likely decline on Monday, October 13, mirroring the US downturn, especially impacting technology, electronics, and export-reliant sectors. Markets heavily dependent on global trade, including South Korea, Taiwan, and Thailand, are expected to underperform. Conversely, defensive sectors like REITs and Utilities, along with high-dividend stocks, are projected to outperform. Foreign capital inflows may also slow pending further clarity.
while many analysts, including those at Reuters and Bloomberg, view Trump’s actions as a “Negotiation Tactic” to gain leverage in upcoming negotiations with china – a strategy employed previously through threats of tariffs - KAsset has outlined potential economic impacts should the 100% tariff be implemented.
The Peterson Institute for International Economics (PIIE, 2025) estimates a 30% average tariff would reduce US GDP by 0.5% from its baseline projection, while a 100% tariff on all Chinese products could decrease GDP by 1.5% to 2.0% within 12 months.The IMF (2024) projects a potential 0.8% to 1.0% decrease in Chinese GDP, particularly affecting its technology export sector. The Yale Budget Lab (2025) suggests tariffs could increase US inflation by 0.8 – 1.2% and diminish consumer welfare.
In response,KAsset recommends the following investment strategies:
* Gradually accumulate mixed funds with flexible portfolio adjustment strategies (K-WealthPLUS Series).
* Increase allocation to foreign debt instruments (K-GDBOND) to mitigate overall portfolio volatility given increased global economic risk.
* Maintain a gold allocation of no more than 5% of the portfolio (K-GOLD) as a hedge against geopolitical risks and trade tariffs.
* Prepare to accumulate US, Chinese, and Asia Pacific tech stocks during market corrections (K-USXNDQ, K-GTECH, K-ATECH).
* Focus on Income Strategy funds (K-GPIN, K-PROPI, K-VALUE) if the risk-off environment persists.
