Asia’s powerhouse exporters could get hit hard if US elections end up deflating the AI boom, though the news isn’t all bad for the region that drives global economic growth.

The Made-in-America market rout that spread across Asia on Friday - triggering circuit-breakers in Seoul and plunging Tokyo and Taipei into bear markets — reflects fear that Washington will hit the brakes on data centers. That would cool the demand for chips and other electronics that’s delivered record trade surpluses. China risks losing a chunk of the high-tech exports that have kept its economy on track. Others like South Korea are still more exposed.

Still, that’s not the only shift in the world economy that could result from the stinging defeat for President Donald Trump’s Republican Party in this week’s midterms.

His war on Iran, unpopular with US voters, triggered the other powerful force shaping economies this year: the surge in energy costs. Asia’s key economies are importers, so they’ve been at the sharp end. Countries like India and Indonesia have seen their external finances, and their currencies, come under strain. Brent crude’s 15% decline this week, on hopes the conflict will de-escalate, offers relief.

The fizzling of the AI trade “will cause economic ripples across Asia,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc. “Slowing demand for everything from chips and cables to cooling systems and electric converters is bound to weigh on export growth.”On the other hand, “lower energy prices will go a long way toward cushioning growth in Asia.”To be sure, there’s no guarantee that the US-Iran war will end just because American voters want it to.

Nor is there much clarity about how a Democrat-led Congress and state governments will regulate AI. And Trump retains control over trade-policy levers like tariffs that have been another big disruptor of Asian economies during his second term. Following is a roundup of some key issues for major Asian economies arising from the US election.

Net exports contributed nearly 40% of China’s growth in the third quarter, the highest share since early 2025, and high-tech products were the leader. The country would face “severe economic headwinds” in the event of an AI slowdown in the US and lower prices for computer hardware could squeeze profit margins across the supply chain, Bloomberg Economics wrote.

China is also heavily reliant on imported energy. It has deployed its massive reserves to cushion this year’s price shock, though there’s still been a hit to profits in industries like textiles that use oil products as inputs.

Chinese leaders will get an early glimpse of the post-midterms Trump with two summits slated for the coming weeks. The current trade truce may not be vulnerable to shifts in Washington, thanks to China’s rare-earths leverage. There’s more to worry about on the home front, where households aren’t spending – leaving growth reliant on AI and other trade. “The mounting risks raise the urgency for Beijing to rebalance growth by strengthening support for domestic consumption,” BE wrote.

Japan has plenty of companies with stakes in American AI, and its stock market took a pounding on Friday. Still, the war in Iran and the back-and-forth over tariffs will also be key for its economy.

Auto firms, who contribute one-quarter of exports to the US, are getting charged 15% under a deal with Trump that also saw Tokyo pledge billions for investments in America. The resource-poor economy, usually a big buyer from the Middle East, has also been forced to turn elsewhere for oil. Its imports from the US were up more than 800% in the latest monthly data.

“If tariff policies and hardline policies toward Iran are constrained to a certain extent, this will halt the deterioration of the environment for Japanese exports,” said Takahide Kiuchi, Tokyo-based executive economist at the Nomura Research Institute. But he sees a short-term risk that the US may instead escalate on both fronts before a new Congress convenes on Jan. 3.

Asia’s third-biggest economy is also the world’s No. 3 oil importer, buying nearly 90% of its crude overseas. Higher prices have strained government finances, inflated the import bill and widened the trade deficit – all pressuring the rupee, which has been among the worse-performing major currencies this year.

What’s more, unlike many Asian peers, India is on the import side of the AI trade — one reason why its stock markets have become a kind of haven amid this week’s slide. For Indian providers of IT services, costs could go down. Even so, economists caution that this key industry remains vulnerable to a worldwide slowdown in corporate tech spending, and say India still ultimately will need to catch up on AI.

Lower oil prices would “alleviate one of India’s key macroeconomic vulnerabilities,” and boost household purchasing power, said Lavanya Venkateswaran, an economist at Oversea-Chinese Banking Corp. But “a genuine slowdown in corporate technology spending could weigh on discretionary IT budgets and, in turn, Indian services exports.”These are the frontline economies, providers of the highest-capacity chips and memory, and they’ve posted extraordinary export growth. Much of these sales go initially to other destinations, in a complex supply-chain network, but the biggest end-user is the data center industry in the US. A Bloomberg Economics analysis found that both economies would take a sharp and swift hit to growth if the AI bubble ever burst, dwarfing the impact elsewhere.

One potential offset, if the US decides to slow down its data-center buildout, is that other countries in Asia may take up some of the slack, HSBC’s Neumann said. Indonesia, the biggest economy in Southeast Asia, hasn’t gotten much benefit from the AI export boom – and the Philippines even less.

Cheaper oil would free up some much-needed fiscal space in the former, where energy subsidies have already jumped more than 50% — and ease some of the inflationary pressure in the latter, where inflation has soared toward 8%. For chipmakers like Singapore and Malaysia, though, a pullback in AI investment would take some wind out of their sails.

Hardware exports, as well as the construction of data centers, have been the key drivers of growth this year, offsetting the oil shock. In decisions that may prove prescient, the central banks in both nations resisted calls to tighten monetary policy at their latest meetings.

Australia is a significant data-center builder itself. The industry has helped drive investment growth as companies like Anthropic PBC look to get involved, even as it threatens a political backlash like the one in the US.

But the combination of chips and server imports and rising energy prices have squeezed the country’s trade surplus this year down to a decade-low level. Cheaper energy would help reverse that and also ease pressure on food prices – all of which have made the country’s central bank one of the world’s most aggressive rate-hikers this year.