4 reasons Asia’s property will endure despite Iran war headwinds

Even before US President Donald Trump launched his tariff blitz in April last year, Morgan Stanley warned that Asia’s trade-dependent economies were particularly vulnerable to an onslaught of protectionism. The region accounted for seven of the 10 economies with the largest trade surpluses with the United States, while Taiwan, South Korea and Japan derived between 15 and 30 per cent of their corporate revenues from the US.

However, those vulnerabilities were less consequential than anticipated. Asian economies proved remarkably resilient last year, in part because tariff rates were lowered but mainly thanks to the surge in the region’s technology exports.

Fast forward almost a year, and fears about Asia’s economies have resurfaced as the rapidly escalating war in Iran increases the risk of a full-blown energy crisis. In a report on March 6, Morgan Stanley said, “Asia remains critically dependent on Middle Eastern supply of crude oil, refined products and [liquefied natural gas] and we believe the market is too complacent about supply chain risks.”