tariffs

Safest Emerging Markets Banks 2026: Tariffs and Upgrades

The Tale of the Tariffs

Within emerging-market economies, ongoing uncertainty over U.S. tariff policy continues to reshape global trade flows. However, the impact varies significantly across regions and by export mix.

For the institutions included in our Safest Emerging Markets Banks, this environment presents both risks and opportunities. Trade volatility can weigh on corporate clients and credit demand, but it also increases the need for specialized trade and supply-chain financing, treasury, and foreign exchange services. Some emerging-market economies are benefiting as U.S. importers shift sourcing away from more heavily-tariffed countries. According to IMF research, trade diversion and import reallocation toward lower-cost alternatives can help mitigate tariff exposure by changing suppliers, relocating production, and rerouting trade. While these measures can help preserve trade activity, they can also introduce higher costs, operational inefficiencies, and greater supply-chain complexity.

Additionally, tariff impacts vary by region and product. In the Asia-Pacific region, U.S. tariffs are estimated at 21% on China and between 2% and 11% on other Asia-Pacific economies.

South Korea and Taiwan remain highly exposed because they depend heavily on technology exports. However, exceptionally strong demand for semiconductors and AI-related components has so far more than offset much of the tariff-related drag on exports. In South Korea, overall exports rose 84% year over year to a record $121 billion as of September, while semiconductor exports surged 263% to $60.3 billion, according to government data.

Over the same period, Taiwan also reported significant export growth, rising 61% to a record $87 billion, driven by global demand for advanced AI chips and technology products. For the South Korean and Taiwanese banks included in our ranking, this export strength supports corporate activity across the technology, manufacturing, and capital investment sectors, even as tariff-related uncertainty persists. More broadly, emergingmarket economies are contending with heightened inflation pressures from the energy shock associated with the ongoing war with Iran, which contributes to volatility and uncertainty for both consumer and commercial banking clients.

Among the winners for Safest Emerging Markets Banks, changes in sovereign ratings and bank regulatory developments in certain jurisdictions drove shifts in our rankings. In November 2025, S&P upgraded Kuwait to AA- from A+, reflecting the government’s progress with implementing fiscal and economic reforms under Kuwait Vision 2035, the country’s national development strategy. The agency also upgraded National Bank of Kuwait to A+ from A, reflecting its strong franchise in its home country with a 30% market share and its success in geographic diversification, as approximately 25% of revenue is from international sources. Consequently, the bank rose five places to No. 13.

In Saudi Arabia, Fitch raised the ratings of Saudi National Bank and Al Rajhi Bank to A from A- in December 2025. For both banks, Fitch emphasized their strong business profiles and credit metrics, while also increasing their government support ratings component. This move boosted Saudi National Bank up seven places to No. 18, and Al Rajhi moved up six spots to No. 20.

In May, Fitch upgraded Komercni Banka of the Czech Republic to A+ from A. The agency revised its global bank rating methodology to give greater ratings credit to loss-absorbing debt buffers in jurisdictions with developed bank-resolution regimes. As a majority-owned subsidiary of Société Générale, Komercni Banka benefits from the group’s large resolution debt buffer. The bank’s ranking climbed four places to No. 23. In Qatar, AlRayan Bank benefited from Fitch initiating coverage with an A rating. The bank is now eligible for inclusion in our Safest Emerging Markets Banks at No. 38.

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War, tariffs and China: What the US midterms mean for the Asia-Pacific | US Midterm Elections 2026 News

Kuala Lumpur, Malaysia – Across the Asia-Pacific region, governments and businesses reeling from the energy shock of the United States and Israel’s war on Iran are watching Tuesday’s US midterm elections closely.

Many want to see “enormous changes” during the rest of President Donald Trump’s term, analysts say, from the war on Iran to his policies on trade and tariffs. But few expect that to happen, even with the Democrats poised to take the House of Representatives, and potentially the Senate, from Trump’s Republican Party.

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“Of course, everybody is watching,” said Steven Okun, a trade specialist and the chief executive of APAC Advisors, a Singapore-based consulting firm. “It’s great political theatre.”

Outside the Middle East, no region has been hit harder by the war on Iran than the Asia-Pacific. Before the start of the conflict in January, the region took in most of the Gulf oil and gas that passed through the Strait of Hormuz.

When Iran closed the chokepoint in response to the US and Israel’s strikes, much of the region was left facing shortages.

The Philippines, which relies on the Gulf for more than 90 percent of its crude oil imports, has been under a national energy emergency since March. Soaring fuel costs have drained the foreign exchange reserves of the region’s poorest economies – Cambodia, Laos, Myanmar and East Timor, according to the Institute of Southeast Asian Studies (ISEAS)-Yusof Ishak Institute in Singapore. Indonesia, Malaysia, Thailand and Vietnam have also spent heavily on fuel subsidies to shield consumers, it said.

Public opinion in the Asia-Pacific region remains firmly opposed to the war, but Okun said a Democratic-controlled US Congress was unlikely to force Trump to end the eight-month conflict.

“With Iran, I don’t see [a Democrat-controlled Congress] having much change at all, other than the fact that the war will be investigated and there will be oversight hearings,” Okun told Al Jazeera. “We might even see an impeachment of the secretary of defence, but it doesn’t change the overall impact of the war.”

Under the US Constitution, Congress holds the power to formally declare war, but Trump has claimed the attacks on Iran were in self-defence and has so far ignored congressional resolutions directing him to withdraw US forces from hostilities. If a Democrat-controlled Congress passes legislation restricting military operations or cutting funding for them, Trump can veto it. Overriding a veto requires a two-thirds majority in both chambers, which Democrats are almost certain to fall short of.

‘Tariffs don’t change’

On trade and tariffs, too, analysts see little room for Congress to rein in Trump.

The US president rattled global markets last year when he imposed “reciprocal” tariffs of 10 percent to 50 percent on some 90 countries, with the aim of shrinking the US trade deficit. Asia was again hit harder than most. Cambodia faced a 49 percent tariff and Laos 48 percent. Vietnam was slapped with 46 percent and Myanmar 45 percent.

After the Supreme Court struck down those tariffs in February, the Trump administration turned to other tools. In July, it imposed tariffs of 10 percent and 12.5 percent on goods from 60 trading partners, accusing them of failing to stop imports made with forced labour. In Asia, the list includes China, Japan, South Korea and seven Southeast Asian nations – Cambodia, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

“In some ways, the new Congress is not going to matter to the Asia Pacific because it’s not going to affect trade policy,” Okun said. “Congress cannot change that … Tariffs don’t change. The war doesn’t change.”

Still, some analysts see a narrow opening.

Stephen Olson, a visiting fellow at the ISEAS-Yusof Ishak Institute, argued in a recent essay that a “strong rebuke of ‘Trumpism’” at the polls could embolden a pro-free-trade wing of the Republican Party that has been “intimidated into standing down during the Trump presidency”.

That, Olson wrote, offers “a glimmer of hope” for Southeast Asian countries that depend on the US market. A Democratic-controlled Congress, he said, could also push for carve-outs and exceptions that would give the region’s exporters “a modicum of relief”. But any deeper shift in US trade policy, he added, will have to wait for the 2028 presidential election.

Joshua Kurlantzick, a senior fellow for Southeast Asia and South Asia at the Council on Foreign Relations, said the region’s wish list goes beyond trade to security.

“I think nearly all of Asia would like to see enormous changes, across many domains, during the rest of Trump’s term,” he told Al Jazeera. “But I think much of the region believes this will not happen.”

Besides “more stability” in trade and tariff policy, Asia-Pacific countries “would like to feel more stable in security guarantees from the US,” he said. They would also like a “more clear, obvious US presence” in the South China Sea, where China’s claims overlap with those of five Southeast Asian nations, and in the Taiwan Strait, which separates China from Taiwan, the self-governed island Beijing claims as its territory.

Businesses will also be watching whether a major Republican loss leads to “greater GOP willingness in Congress to stand up to Trump, along with Democrats, on issues important to companies in Asia,” Kurlantzick said, including tariffs, trade policy, arms sales and “overall economic unpredictability”.

US-China ties

One area where analysts do expect some change is US policy on Chinese technology.

The new Congress, whichever party controls it, will pass tougher restrictions on China, said Okun at APAC Advisors.

These include the Remote Access Security Act, which would extend export controls to remote access of US goods, software or technology and the Chip Security Act, which would require companies to verify that advanced artificial intelligence (AI) chips remain in authorised locations, to prevent diversion to foreign adversaries. It also includes the Multilateral Alignment of Technology Controls on Hardware Act, known as the MATCH Act, which would press allies to bring their controls on chipmaking equipment in line with Washington’s, to keep advanced chipmaking technology out of China’s hands.

“The next Congress is going to pass them regardless of midterms because both parties agree on them,” Okun said. “The person who is least restrictive now on China is the US president,” he added, referring to Trump’s courting of China’s President Xi Jinping.

The two men have met twice this year as ties have warmed after a bitter and costly trade war last year. To preserve the fragile trade truce, Trump has also held off approving a $14bn package of arms sales to Taiwan, which would be the largest ever for Taipei.

Some analysts meanwhile worry that a lame-duck Trump, hemmed in at home by a Democratic Congress, could turn more forcefully to foreign policy.

“We should not be surprised by continued erratic foreign policy,” said James Guild, an assistant professor at the Indonesian International Islamic University.

“The Democrats have a poor record of effectively opposing and holding Trump accountable using conventional tools of congressional oversight,” Guild said. “We will have to wait and see if they rise to the moment this time.”

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US food importer sues Trump over 50 percent tariffs on Canadian goods | Courts News

The lawsuit argues Trump bypassed Congress and misused a century-old law to impose sweeping tariffs on Canadian imports.

A US food importer is suing US President Donald Trump over his 50 percent tariffs on Canadian goods, arguing he lacks the legal authority to impose sweeping tariffs without congressional approval.

Gellert Global Group, a New Jersey-based company that imports Canadian cheese, filed the lawsuit on Tuesday in the US Court of International Trade in New York.

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The company says the tariffs are driving up its costs and disrupting its relationships with suppliers on both sides of the border. Between September 16 and October 11, Gellert had paid more than $520,000 in duties, according to the complaint.

“Gellert Global Group has spent generations building trusted relationships with suppliers, customers and partners across the food industry,” said Thomas Gellert, the company’s co-chief executive officer, in a press release. “These tariffs disrupt those relationships overnight and create costs and uncertainty that ripple through the entire supply chain.”

The lawsuit challenges Trump’s decision to use a Depression-era law to impose tariffs on a wide range of Canadian products, including dairy products, furniture, clothing and wine.

Trump first imposed the 50 percent tariffs over the summer, accusing Canada of discriminating against American-made cars, alcohol and dairy products. He expanded the measures in September, adding more products in response to Canadian retaliatory tariffs.

The lawsuit argues that the law doesn’t apply to the Canadian policies the Trump administration says are discriminatory, since two of them “arose in response to the president’s own tariffs, while the third involves Canadian dairy policy governed by the US-Mexico-Canada Agreement (USMCA)”.

It also questions why Canadian cheese is being taxed over disputes involving alcohol and cars.

“No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required,” said Sara Albrecht, chairman and CEO of the Liberty Justice Center, a nonprofit legal organisation that filed the suit on Gellert’s behalf.

The White House did not immediately respond to a request for comment, according to the Reuters news agency.

At the centre of the case is Section 338 of the Smoot-Hawley Tariff Act of 1930, which allows the president to impose tariffs of up to 50 percent on imports from countries found to discriminate against American businesses.

The provision had never been used until Trump invoked it this year.

The lawsuit argues that newer laws passed by Congress since then, such as Section 301 of the Trade Act of 1974, require investigations, public comment and other safeguards that Gellert says the Trump administration has bypassed, and that these override Section 338.

“The administration cannot skip those protections by reaching for a 1930 statute that no president had ever used to impose a tariff,” said Jeffrey Schwab, the Liberty Justice Center’s senior counsel and director of litigation.

In addition, the lawsuit says that even if Trump is allowed to use the older law, he hasn’t met its requirements, including waiting 30 days before tariffs can be collected on new products added to the list.

The administration only waited seven days to start collecting tariffs on cheese in September, according to the lawsuit.

Gellert is asking the court to declare the tariffs illegal, stop them from being collected, and order refunds with interest for importers who have been impacted.

The lawsuit marks the fourth major legal challenge to Trump’s tariffs.

In February, the US Supreme Court struck down most of the tariffs he imposed in 2025, and a trade court later ruled against a temporary 10 percent global tariff. A separate challenge to tariffs imposed over alleged forced labour in international trade is still pending.

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