US-APAC trade pacts ease exporter worries: Fitch says deals to lift Asia’s GDP; India yet to secure accord

A series of bilateral trade deals between the US and several Asia-Pacific (APAC) nations have helped reduce uncertainty for Asian exporters and may marginally boost the region’s GDP over the next few years, Fitch Ratings said on Sunday.The US-based rating agency noted that although India is yet to finalise a trade pact with Washington, its average 50% tariff rate now stands significantly higher than those faced by most Asian exporters, PTI reported. “However, the two countries may still reach an agreement in the near future,” Fitch said in a statement.“The recent series of bilateral trade agreements between the US and several APAC countries reduce uncertainty around the outlook for Asia’s exporters, and could provide a slight lift to GDP over the next few years for the countries involved,” it added.Between October 20 and 30, the US announced new trade deals with China, Japan, Korea, Vietnam, Malaysia, Thailand, Australia, and Cambodia. Fitch said the greatest economic impact would come from halving the 20% fentanyl-related US tariff on China, which would lower the effective tariff rate by about 10 percentage points.The agency also pointed out that Washington and Beijing have agreed to pause for a year on tightening trade restrictions, including China’s curbs on rare earth exports and the US extending export licensing requirements to companies majority-owned by entities on its restriction lists.

“We expect these developments to have a small positive impact on economic growth in China and the US over 2026–2027,” Fitch said, quoted PTI. “Some other Asian countries, especially Korea and Vietnam, should also see an uplift through the influence of stronger demand in China and the US, although in general the deals’ direct boost to growth will be more limited.”However, Fitch cautioned that US tariffs on China remain higher than those on most other trading partners, even after the latest agreement.“Greater clarity about tariffs should strengthen exporters’ confidence in planning medium- and long-term adjustments to supply chains. This, in turn, could support investment growth, particularly in markets with significant exports to the US, such as Malaysia, Thailand, and Vietnam,” Fitch added.The agency further noted that the trade pacts underline Washington’s push to expand rare earth mining outside China and could spur investment in the sector across Southeast Asia and Australia, though the broader macroeconomic impact is expected to remain limited in the near term.