Asia’s Record Stock Rally May Unravel as Tariffs Bite, Funds Say

The record-breaking rally in Asian stocks is set to come under increasing pressure as Donald Trump’s tariff hikes start to sap earnings, some of the region’s biggest funds say.

Markets are underestimating the impact on company profits of the higher US levies that are likely to crimp exports in coming months, according to T. Rowe Price Group Inc. and Franklin Templeton, among others. Shares in export-reliant South Korea and Taiwan are among the most vulnerable, they say.

“Current earnings and margins for exporters have not yet fully reflected the impact of the recent tariff agreements,” said Clarence Li, a ...