KUALA LUMPUR: Asia Pacific countries like Malaysia could see an impact, through trade and investment channels, if the US adopts a less proactive foreign engagement approach after their Presidential election.
Moody's Investors Service said policies under the next administration could remain, or see a gradual retrenchment from trade and investment ties and curbs on immigration.
In general, the credit implications are likely to be limited as Asia Pacific sovereigns' direct exposure to a potential slowdown in US imports is generally small.
"However, Asian economies whose exports to the US are focused on high value-added manufacturing products are more vulnerable to policies that disincentivise foreign sourcing of business services," it said.
In this respect, Moody's says that Malaysia (A3 stable), Taiwan and Korea would be most vulnerable to efforts to repatriate high value-added manufacturing jobs.
"Over a longer period of time, a more insular climate in the US could crimp foreign direct investment flows, as expansion of production facilities refocus on domestic locations."
Remittances to Asia could weaken if the US tightened immigration rules it added.