In the week following the recent election, non-US stocks experienced their largest decline since August 2024, driven by investor concerns over potential trade conflicts.

The uncertainty surrounding proposed tariffs from Donald Trump has already impacted investment levels outside the US, leading to sell-offs in European and emerging markets stocks.

If implemented, Trump's proposed tariffs, which could range from 10% to 20% on all countries and as high as 60% on China, are expected to exacerbate trade tensions.

Economists warn that these proposed tariffs could have significant repercussions for global economic growth.

BCA Research has reported a deceleration in East Asian exports, which are viewed as a crucial indicator of global economic health, aligning with negative signals from leading trade indicators.

In Japan, core machinery orders fell by 0.7% from the previous month and 4.8% year-over-year in September 2024, reflecting broader economic concerns.

Despite a 2.6% increase in Singaporean electronics exports compared to the previous year, growth has slowed from 4.0% in September.

Moreover, Singapore's domestic exports, excluding oil, saw a significant decline of 7.4% from the previous month and 4.6% year-over-year in October 2024, with exports to China plummeting by 22.3% year-over-year.

Given the combination of slowing growth, heightened trade tensions, and stretched equity valuations, analysts are advising investors to adopt defensive strategies in anticipation of increased market volatility in 2025.

BCA analysts emphasize that the trends in East Asian exports are critical for assessing the overall health of the global economy, reinforcing the need for caution among investors.