How tariff dominoes fall: what moves first, and what follows 

US trade policy is a moving target

US trade policy has been anything but static. The Tax Foundation counts more than 50 tariff changes since January 2025 and estimates that new tariffs now cover roughly 54% of US goods imports in 2026.¹ The Supreme Court struck down tariffs imposed under emergency powers in February and the administration has been rebuilding its toolkit through other legal routes.²

The US-China truce adds a deadline to watch. Terms were due to expire on 10 November, but Treasury Secretary Scott Bessent has said conditions would stay in place until 10 January 2027.³ Markets are being asked to price a pause, not a settlement.

Domino 1: the US dollar – where trade tensions hit first

Currencies react first, but the direction is not guaranteed. In theory, tariff escalation can lift the dollar as investors seek safe havens. In practice, the dollar fell after the “Liberation Day” tariffs in April 2025 and again when tariffs were threatened against Europe in January 2026, as investors moved into the yen and Swiss franc.⁴ Tariffs can dent US growth, push up inflation and invite retaliation, all of which can weigh on the currency. For APAC, the first gauges are the dollar against the Japanese yen, Australian dollar and Chinese yuan.

Domino 2: goods prices – who pays the price?

Tariffs are a tax on imports, so the big question is who pays. Importers, retailers and shoppers share the cost with foreign exporters, and how it’s split affects company profits. Estimates vary widely. A recent study by economist Caroline Freund found foreign exporters absorbed about 47% of the 2025 tariff burden, far more than earlier studies suggested, while other analyses, such as the New York Fed’s, put the exporter share at only 6–14%.⁵

Domino 3: retailers – where margins feel it first

Retailers that rely heavily on imports and make little profit on each sale, such as clothing, electronics and furniture, often see their share prices move before sales change. When the Supreme Court struck down the emergency tariffs on 20 February, shares in import-heavy sportswear names such as Adidas, Deckers and Under Armour rose by more than 2% in morning trading, well before any change in sales. When a replacement 15% tariff followed days later, Nike and Gap shares fell.⁶

Domino 4: Manufacturers  – Where the impact cuts both ways

Manufacturers face a double effect. Tariffs on the materials and parts they buy push up costs, while protection on finished goods can help US producers. Investment and plans to bring production back home take time, so the effects tend to show up later in new orders and factory surveys.

Use Stock Screener to explore shares across industrials, manufacturing and export-driven sectors.

Domino 5: commodities – where demand sets the direction

Commodities, such as metals and crops, move on expected demand. A slowdown in Chinese factories weighs on industrial metals, while purchase commitments tied to the truce and September’s Trump–Xi summit, such as soybeans and coal, can support farm and energy markets, although delivery has been uneven.⁷ Gold often follows the dollar and interest rates more than tariffs themselves.

What it could mean across APAC

Exporters feel it last in earnings, but their shares can move early on expectations. Here's how it could play out across the region:

• Japan: The yen sits at the top of the chain. A weaker yen can cushion exporters such as autos and machinery, while a sudden yen rally on risk aversion can hit Nikkei heavyweights. Watch the dollar-yen rate first.
• Australia: The Australian dollar and local miners are a good barometer of China-linked demand. A truce extension that supports Chinese industrial activity tends to help iron ore and copper sentiment. Escalation can hit the Australian and resource names quickly.
• Singapore and Hong Kong: As trade and financial hubs, both are exposed to shipping volumes, re-exports and risk appetite. Singapore's main index leans on banks and property trusts, so interest rate expectations matter too. Hong Kong carries heavier exposure to China-linked technology and consumer stocks.
• China-linked markets: The yuan, the CSI 300 and Hang Seng Tech react to every headline on tariffs, rare earths and export controls. Beijing’s pause on rare earth restrictions is a key part of the truce, so any wobble there would likely hit this group first.⁸

What traders may want to watch

Here's your checklist:

1. Truce details: Whether the extension is made official, and whether rare earths and purchase commitments hold.
2. New sector tariffs: Targeted duties can bypass the headline truce.
3. Currency moves: If the dollar, yen and yuan move together, markets may be repricing trade risk broadly.
4. Corporate guidance: What retailers and manufacturers say shows who is absorbing the cost.

The takeaway

Trade policy rarely moves everything at once. The usual order is currencies, then sector shares, then commodities, then earnings, and the lag between them can create opportunities as well as risk. Because policy can change on short notice, the sequence matters more than any single headline.

Stay tuned, because with trade policy, the next headline is never far away!

References

1. Tax Foundation, “Trump Tariffs Tracker: Rates, Revenue, and Impact”. https://taxfoundation.org/research/federal-tax/trump-tariffs-trade-war/
2. Tax Policy Center, “Tracking Trump Tariffs” (Supreme Court ruling, Feb 2026). https://taxpolicycenter.org/features/tracking-trump-tariffs ; Trading Economics (ruling on 20 Feb, replacement tariffs under a temporary statute). https://tradingeconomics.com/united-states/imports/news/461363
3. CNBC, “U.S.-China trade truce extended for two months, Bessent says”, 24 Sep 2026. https://www.cnbc.com/2026/09/24/us-china-trade-truce-bessent-trump-xi.html ; NBC News, 23 Sep 2026. https://www.nbcnews.com/business/economy/us-china-extend-trade-truce-trump-rcna599525
4. Reuters via Kitco, “Dollar weakens as dust settles on Trump’s shock tariff pause”, 10 Apr 2025. https://www.kitco.com/news/off-the-wire/2025-04-10/dollar-weakens-dust-settles-trumps-shock-tariff-pause ; CNBC, “Dollar falls, investors look for safe havens as Trump ups tariff ante”, 19 Jan 2026. https://www.cnbc.com/amp/2026/01/19/dollar-falls-investors-look-for-safe-havens-as-trump-ups-tariff-ante.html ; CEPR/VoxEU, “Tariffs and US dollar depreciations: Not so surprising after all”. https://cepr.org/voxeu/columns/tariffs-and-us-dollar-depreciations-not-so-surprising-after-all
5. Tax Foundation, “Exporters Bore Higher Share of the 2025 Tariffs than Previously Estimated, New Research Finds”. https://taxfoundation.org/blog/exporters-bore-higher-share-2025-tariffs-than-previously-estimated/ ; New York Fed, Liberty Street Economics, “Who Is Paying for the 2025 U.S. Tariffs?”, 12 Feb 2026. https://libertystreeteconomics.newyorkfed.org/2026/02/who-is-paying-for-the-2025-u-s-tariffs/
6. Front Office Sports, “SCOTUS Strikes Down Trump Tariffs, Sportswear Retailers Rally”, 20 Feb 2026. https://frontofficesports.com/sportswear-companies-big-winners-of-trumps-supreme-court-tariff-loss/ ; CNBC live updates, 19–20 Feb 2026 (Jefferies on import-heavy names). https://www.cnbc.com/2026/02/19/stock-market-today-live-updates.html ; Barchart, “DoorDash, Booking, Chewy, Wayfair and Expedia shares plummet” (Nike, Gap fall on new 15% tariff). https://www.barchart.com/story/news/368048/doordash-booking-chewy-wayfair-and-expedia-shares-plummet-what-you-need-to-know
7. CNBC, “Soybeans, planes and rare earths: What they say about fragile U.S.-China trade truce”, 23 Sep 2026. https://www.cnbc.com/2026/09/23/trump-xi-summit-us-china-trade-rare-earth-soybean-plane.html ; Center for American Progress, “Trump-Xi Summit Scorecard”. https://www.americanprogress.org/article/trump-xi-summit-scorecard-assessing-the-results-of-the-september-meeting/ ; Carolina Political Review, 7 Oct 2026 (China’s account omits coal). https://carolinapoliticalreview.org/editorial-content/2026/10/7/implications-of-xi-trump-summit-in-washington-dc
8. Startup Fortune, “US and China extend their rare earth truce by just two months to January”. https://startupfortune.com/us-and-china-extend-their-rare-earth-truce-by-just-two-months-to-january/