How Equities First Financing Could Help Asia’s Growing Economies Weather the Impact of Tariffs

Emerging economies in Asia are adapting to new U.S. tariff policies that have sent shockwaves across the global trade environment. For mid-market businesses that are still in developmental stages, obtaining financing in this environment could present an obstacle, as uncertainty and the potential negative impact of tariffs on export prospects could tighten traditional lending.

While the private credit market in Asia Pacific has doubled in size over the past five years, according to Preqin, it still accounts for less than 7% of the global market. This gap suggests room for growth, but also lending constraints that may be tough to break given the current situation.

“The tariff situation is creating a complex chessboard across Asia’s export economies,” said Al Christy Jr., CEO of alternative financing firm EquitiesFirst. “We’re seeing companies rapidly recalibrating their supply chains.”

 

 

In this environment of heightened uncertainty, access to flexible capital becomes increasingly important. Christy’s firm, which is formally known as Equities First Holdings, provides liquid capital financed against publicly traded equity assets, offering one potential avenue for Asian companies seeking to navigate short-term disruptions while maintaining their long-term growth trajectories.

 

 

Long-Term Growth Amid Short-Term Disruption

 

The immediate impact of the tariffs announcement was substantial for Asian markets. Vietnam’s main stock index recorded a 6.7% drop—its largest one-day decline since September 2001—with approximately 70% of shares on the Ho Chi Minh Stock Exchange falling by the daily limit of 7%. Regional markets in Thailand, the Philippines, Malaysia, and Singapore also experienced significant declines.

Meanwhile, companies that shifted production to Vietnam as part of “China Plus One” strategies now face difficult decisions about future operations.

“While this level of recalibration creates immediate challenges, it could also accelerate innovation as companies seek to maintain competitive advantages and lock them in for long-term growth,” said Christy Jr of the broader region’s response to tariff increases. “The countries and companies that can adapt most rapidly will emerge stronger.”

Despite the spectre of tariffs, the longer-term outlook for Asian economies remains promising, particularly as regional integration increases. According to the Asian Development Bank’s Economic Integration Reports, intra-regional trade in Asia has continued to increase substantially over recent decades, creating stronger economic ties within the region.

“Regional markets in Asia have been deepening for some time now,” said Christy Jr. “And the growing middle class across ASEAN countries is creating domestic consumption patterns that can sustain growth regardless of external trade policies.”

The rise of private credit in the region also provides alternative financing avenues. According to Preqin data, Asia-Pacific private credit AUM grew dramatically from $15.4 billion in 2014 to $92.9 billion as of September 2023, representing a 500% increase. Over the last five years alone, the market has more than doubled in size. But, as noted above, the Asia Pacific region still accounts for less than 10% of the global private credit market despite this growth.

 

Next Steps

 

Treasury Secretary Scott Bessent told CNBC that nearly 70 countries have approached the U.S. about negotiating over trade barriers.

Asian countries are also pursuing internal policy shifts. South Korea, for example, has moved swiftly to protect its vulnerable industries, announcing three trillion won ($2 billion) in additional support for its automobile sector, including financial support for automakers, discounts, and tax cuts.

And the tariff situation has triggered regional coordination efforts. Malaysia, which holds the rotating ASEAN chairship in 2025, welcomed Trump’s 90-day tariff pause and scheduled a Special ASEAN Economic Ministers’ meeting to discuss a coordinated response.

Many Asian nations are accelerating efforts to diversify their trade relationships beyond the United States. China is actively capitalising on this situation, writes Chatham House’s Asia Pacific coordinator Ben Bland in a recent op-ed. China is positioning itself as the “responsible defender of the global trading system” in contrast to American “unilateralism and economic coercion,” writes Bland.

Since Trump’s tariff announcement, Chinese President Xi Jinping embarked on a tour of Southeast Asia—visiting Cambodia, Malaysia, and Vietnam—where he signed several economic cooperation agreements.

EquitiesFirst’s “Progressive Capital” approach may prove particularly relevant in this environment of transition and adjustment. By enabling companies to access capital while maintaining their equity positions, this financing model can provide the capital to fund short-term operational adjustments while maintaining long-term positions.

For investors and business owners in the region, the coming months will require careful navigation of changing trade patterns and financing conditions. Those with diversified market exposure and flexible capital structures will be best positioned to withstand short-term disruptions while capitalising on Asia’s fundamental growth trajectory. The combination of equity-based financing and strategic market positioning is one potential path through the current uncertainty.

“When traditional financing tightens during trade disruptions, alternative capital solutions can be an option for businesses looking to weather the storm and maintain future growth goals,” said Christy Jr.