Policy swings a key risk for Asian businesses under a Trump administration: DBS’ Tan Su Shan

ASIAN corporates will have to stay agile and be ready for policy swings that will likely come out of Donald Trump’s second US presidential term, said Tan Su Shan, deputy CEO of DBS.

Business leaders in Asia have gotten used to big geopolitical upheavals in recent years, Tan added. But there will still be policy unknowns under the new Trump administration that are difficult to predict.

“It behoves us as business leaders to remain agile, to be able to pivot quickly when things change overnight, and to be ready,” Tan said on Thursday (Nov 7), at a panel at the Singapore FinTech Festival 2024.

The panel on leading global financial services in Asia also featured Eric Lim, chief sustainability officer at UOB; Daniel Hong, vice-president of Tencent Financial Technology; Yoshihiro Hyakutome, senior managing executive officer and co-head of global banking unit at SMBC; and Dushyant Shahrawat, director of Rosenblatt Securities.

Panellists discussed opportunities for Asian financial services amid market volatility, the rise of generative artificial intelligence (GenAI), the increased focus on sustainability and the importance of fintech.

Tan noted that in the short term, markets have decided that a Trump win is good for them and the US dollar. Trump will likely bring back inflationary forces, resulting in slower or fewer rate cuts than previously expected.

But in the longer term, if fiscal spending increases, it may put more pressure for rates to go up, she said.

With the Trump victory, supply chains are also going to get more bifurcated or disjointed, Tan added.

But, while there may be risks of inflationary pressures and broken supply chains, there also come opportunities related to intra-regional Asian trade, the “China+1” strategy and trade connectivity.

Meanwhile, UOB’s Lim noted that voting electorates globally have been drifting “right” as they were unhappy with incumbent administrations, whether due to inflation worldwide or immigration, as in the US.

With Trump in the pilot’s seat, there is change in the air, he added.

“The challenge with the existing environment is that the margin for error is very thin,” he said, noting that Trump is stepping into a global environment that is “way messier” than during Trump 1.0. “I don’t know if national leaders globally are as skilled in dealing with real geopolitical challenges, as opposed to when it was about economic cooperation and being prosperous together.”

For Asean, if leaders stay focused on building their own economies and collaborating with different countries, the region should be able to continue to rise, he added.

Speaking on other opportunities for Asia, Tan noted that GenAI will boost productivity.

Meanwhile, renewable energy is another area that provides both opportunities and challenges.

“There’s a lot of need for solar, wind and hydro, and Asia has it in various pockets. It’s just pulling it (together) so that (we) can actually replace coal,” she said.

For Asean, the challenge, however, lies in building the needed infrastructure as well as getting enough funding and investments.

Lim of UOB noted that the region could tap China, a major power that could spur the global decarbonisation journey.

“When we talk about China, there’s a lot of focus on its internal stresses, but one of the things that’s really clear is its massive green industrial capability as well as capacity,” he said.

“Asean needs to figure out how to work with China in a mutually beneficial and respectable way,” he added.