Asia’s grip on supply chains ‘will counter tariff hikes’ – Daily Business

Asia’s grip on the supply chain will enable it to continue building exports despite the threat of higher tariffs by western economies, according to a trust manager.

The dominance of China, Taiwan, India and Korea across a number of sectors from renewables to car production means they are capable of withstanding attempts to keep a lid on expansion from the east.

Around 70-80% of the supply chain in renewables comes from Asia, while China can leverage its rare earth minerals used in many products and processes.

At the same time, this is providing more opportunities for investors in Asia’s expanding sectors such as AI, automotive and pharmaceuticals.

Gabriel Sacks, manager of Aberdeen Asia Focus, invests in Asian (ex Japan) quoted smaller companies, defined as below $10 billion. It recently increased exposure to Korean consumer, financial development in India, and infrastructure.

It invests in companies typically making components and equipment sold to the bigger companies around the world.

“We are looking for those companies in the supply chain that capture the growth in the industry and are less researched,” he said in an interview.

He did not think the AI bubble was due to burst, though he did admit to being cautious about the returns from the capex being applied by companies and governments around the world.

“Companies in Asia are well-placed to benefit from this,” he said, conceding they could expect a response from the west.

“It is reasonable to assume there will be tariffs on the automotive industry. Everyone is concerned about cheap Chinese exports. But even so we expect export success from China.”

Despite its dominance, China accounts for just 13% of the Asia Focus portfolio, 16% when including Hong Kong, as it seeks out what it sees as better opportunities in countries such as Taiwan and Vietnam.

It has reduced its exposure to Taiwan through profit taking after a good run on the back of AI and other tech growth.

In in the year to the end of July the trust’s net asset value delivered a NAV total return of 22.3% and a share price total return of 23.9%, outperforming all its peers (MSCI AC Asia ex Japan Small Cap Index returned 9.5%). Net assets increased to £630.2 million (2025: £558.6m) and net asset value per share increased to 460.05p (2025: 381.72p).