DBS CEO: How Trump Tariffs Drove Diversification and India's Outperformance

Initial Market Shock & Lessons Learned

• ⚠️ The initial reaction to Trump's tariffs (April 2nd) was characterized by market collapse, a falling dollar, paused deals, and widespread uncertainty, with many CEOs admitting "I don't know."
• 🧠 COVID-19 served as a dry run for businesses, teaching the importance of stress testing for unknown unknowns and the critical need to diversify across energy, tax, supply chains, demand chains, vendors, clients, and currencies.

The Imperative of Diversification

• 🎯 Trump's tariffs on April 2nd intensified the push for diversification, particularly on the demand side, leading to a focus on "TOTUS" (Trade Outside the US).
• 📈 There's a reduced reliance on the US as the primary consumer market, with countries increasingly exploring intra-regional trade, especially within Asia, Asia-GCC, Asia-EU, and the Global South.
• 🔑 The "weaponization of everything"—including trade, chips, technology, and money flows—has made businesses more vigilant and agile, recognizing that anything can be used as a tool.

Shifting Global Trade Dynamics

• 🚀 Businesses have demonstrated remarkable agility in pivoting supply chains and demand chains rapidly, with some manufacturers shifting operations in months.
• ✨ New trade corridors and relationships are being forged, exemplified by significant structural growth and Foreign Direct Investment (FDI) in GCC markets like Saudi and Abu Dhabi.
• 🇮🇳 India is highlighted as an outperformer, attracting new flows such as the Taiwan electronic manufacturing ecosystem (including Foxconn) moving to India.

Intra-Regional Growth & China's Innovation

• 🤝 There's substantial intra-regional activity and collaboration across Southeast Asia, including Singapore-Malaysia, China-Malaysia, China-Vietnam, and North Asia (Japan, Korea) to Southeast Asia.
• 🇨🇳 China exhibits pockets of exciting growth in deep tech, including AI, biotechnology, small language models, humanoid robots, and low-flying drones, strongly supported by the government.
• 💡 Despite a tepid consumer confidence and a challenging property market, China's ability to compete fiercely ("involution") and its technological advancements are notable.