Strategy comes first: Hong Kong marketers navigate tariff turmoil

US president Donald Trump has imposed a whopping 145% levies on all imports from China, escalating a trade conflict already inflamed by Beijing’s earlier retaliatory measures.

China hit back hard against the US’ “bullying” tariffs, heightening concerns that the intensifying trade war could push the global economy toward recession and spark renewed volatility in financial markets. On Monday, authorities pledged to hold the fort. “The US threat to escalate tariffs on China is a mistake on top of a mistake,” the commerce ministry said via a statement. 

The threat “once again exposes the blackmailing nature of the US,” the statement said. “China will never accept it. If the US insists on its own way, China will fight to the end.” 

Beijing's stance reflects a deliberate and measured confidence from the Chinese government, which has chosen to position itself as a counterbalance to what it describes as “unilateral bullying” by the US.

In Hong Kong, chief executive John Lee criticised the US tarrifs as "abusive" and "barbaric" arguing they undermine global trade norms and erode investor confidence. 

While acknowledging Hong Kong’s export sector would be impacted, Lee said the city remains committed to “consolidating advantages” and “mitigating risks.” He noted that US-related exports had declined from 8.6% in 2018 to 6.5% in 2024, while exports to ASEAN nations rose from 7.4% to 8.7%.

Lee said that the city will increase its efforts in seven areas, including "fully seizing the opportunities of national development", promoting international exchanges and cooperation and deepening regional cooperation, accelerating industrial upgrading and transformation, and seizing the opportunities of international companies to reconfigure their assets.

Which sectors in North Asia are hit hard?

As the US-China trade war escalates, marketers in North Asia are facing a new wave of economic uncertainty. Marketers and CMOs MARKETING-INTERACTIVE spoke to shared that the tariff shockwaves can introduce risk in overall business, resulting in shrinking marketing budget, adding that the retail sector and exporters may be impacted the most, but they were hesitant to go on the record for a comment.

In a conversation with MARKETING-INTERACTIVE, Freeman Chiu, former marketing director, APAC, Otter Products, said early indications suggest that manufacturing, consumer electronics, automotive, and semiconductor industries will be most affected by the trade war.

"The degree to which consumers will absorb these rising costs is still unclear. While US industries will also be hit by Chinese counter-tariffs, China's immense size and focus on technological self-reliance may provide a buffer," he added.

The automotive sector, especially the EV race between Tesla and BYD, and the semiconductor industry, central to the AI revolution, were already in the spotlight, he added. "The pandemic-driven rhetoric of 'decoupling' from China has already complicated the situation for manufacturing and consumer electronics over the past two years, so what will be the top management making decisions on the cost of making goods (or shifting their manufacturing away from China) while coping with tariffs?"

Further shrinking in marketing budget

For marketers operating in the North Asia region, the impact is twofold: on one hand, rising costs and import restrictions are forcing brands to rethink sourcing and distribution strategies; on the other, evolving trade policies demand a more agile and localised approach to customer engagement. 

True enough, as markets are affected with less confidence, consumers will be spending less, said Eric Thain, former director of customer and brand, HK Express, who is a principle consultant and venture partner at e&c. "Further, tariffs will impact how international brands are marketing into different countries, increasing price of goods, decreasing competitiveness against local or tariff-exempt competitors. Both key factors will directly impact national marketing budgets and results."

"This also marks an unprecedented shift into nationalisation, versus globalisation decades ago. As the risk arises, it is an opportunity for local brands to highlight ‘proudly made local’ messages. In China, it further pushes the "guochao" (國潮) trend forward and accelerates local brands growth," he added.

With more consumers being reluctant to spend, brands in China also face pressure in allocating marketing budgets. According to Totem’s 10th annual report on marketing and media, overall marketing budgets continue to face downwards pressure in China, with 48% of brands reducing overall budgets for 2025. Agencies and vendors lead the way in terms of planned budget cuts headed into 2025, said the report.

On the other hand, the immediate burden of tariffs falls on exporters, said Andrew Yeung, former assistant GM of marketing and promotions, Harbour City. However, if these trade tensions persist, they could have broader economic repercussions, he added.

"Shrinking profit margins for exporters may eventually lead to reduced business investment, lower employment, and a decline in consumer confidence. This could dampen local consumption, not just through tangible income loss, but also through a more intangible erosion of economic optimism. In such an environment, rational consumers often become more risk-averse, cutting back on spending and saving more for future uncertainties," he added.

What more can be done?

Nonetheless, marketers who are thinking of further driving efficient marketing spend while pushing brand awareness are asking the wrong question, said Thain, adding that strategy needs to come first in this uncertainty ahead of just executional tactics.

"Also, marketing efficiency has been a thing for many years so the question is how much more efficient can spend be? Marketers need to be careful not to go into a rabbit hole, especially managing CEO expectations and confidence. This is a time where marketers can add value to CEO in understanding the market, customers and finding other growth opportunities, or else the first thing CEO will do is cut cost and spend. Marketing will be the first to go," he added.

He added that marketers need to be much closer in understanding where the business is going, if not already. "The tariffs will surely impact commercial focus. It is marketing job to support the strategy and ensure that the approach, customer outreach, and storytelling is clear. Refocusing on marketing nationally will take priority until the uncertainty lifts."

On the marketing front, this is where strategic brand positioning becomes critical, according to Yeung. "Tariffs raise prices, but price is only one of the factors influencing consumer decisions. By emphasising the uniqueness, quality, or emotional connection of a brand, whether through storytelling, heritage, or functionality, marketers can still maintain customer loyalty even in the face of higher costs or minimise the decrease of consumption. Creating the worth-of-money brand image is the key to stay competitive in the market."

"The war is not just between the US and Hong Kong but with the whole world. As such, Hong Kong brands are now competing on a level playing field with brands from other non-US regions. This intensifies global competition and makes strong branding more important than ever," he added.

Meanwhile, Chiu said this is the moment to crack the digital code and adopt more experimental and agile marketing strategies, similar to what Chinese marketers have been doing for years. "The key lies not in the number of platforms used, but in the integrated approach to content that drives both awareness and growth."

To maximise "value for money," brands must streamline their messaging across the marketing funnel, moving beyond the overreliance on sales promotions and discounts and flatten the ‘top of funnel/bottom of funnel’ approach, he added.

Social media wise, it will require a "think fast, act fast" approach, where brands leverage timely posts, KOL/influencer partnerships, and “AI as a tool” to cultivate stronger consumer relationships, he said. "The relatively low cost of content creation empowers brands to produce a higher volume of meaningful and contextual organic social content."

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