The Association of Southeast Asian Nations (Asean) has presented a unified stance against “escalating trade protectionism” and an uncertain economic landscape amid global economic upheaval caused by sweeping tariffs of the new Trump administration.
The United States at the start of April imposed sweeping tariffs on most goods imported to the US, as well as much higher levies on dozens of rivals and allies alike. A week later, US President Donald Trump announced that he would pause many of his new tariffs for 90 days, even as he raised them further on imports from China.
By mid-April, the White House announced that China faced tariffs of up to 245 per cent due to its retaliatory tariffs on American goods. Asean had decided not to retaliate against the announcement of reciprocal tariffs, choosing instead to engage in constructive and forward-looking discussions to tackle emerging challenges.
Asean issued a joint statement on Sunday statement following the 28th ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting in Milan where it warned that tariffs would have a major impact on trade and economic stability in Southeast Asia.
“Escalating trade protectionism weighs on global trade, leading to economic fragmentation, affecting trade, investment and capital flows across the region,” Asean said.
“Near-term prospects may also be affected by other external risks, including tighter global financial conditions, growth slowdown in major trading partners, and reduced investment flows,” it added.
The bloc called for “enhanced regional unity and cooperation” amid growing economic uncertainty and said it would prioritise maintaining resilience while remaining flexible enough to respond to near-term challenges.
“On the fiscal front, this means rebuilding policy buffers while continuing to provide well-targeted support to sustain growth while implementing structural reforms,” the statement read. “We will also carefully recalibrate monetary policy based on domestic conditions.”
The bloc reaffirmed its commitment to multilateralism and a “rules-based, non-discriminatory, free, fair, open, inclusive, equitable, and transparent multilateral trading system”.
“We urge international organisations to uphold multilateralism and promote free trade, analyse and monitor the potential impact of trade tensions on the global economy, and support their members in providing policy advice to manage the negative shocks that may arise.”
Trump’s tariffs are increasingly clogging up the wheels of a world economy which for decades was greased by predictable and relatively free trade.
Big-name multinationals, right down to niche e-commerce players, last week cut sales targets, warned of job cuts and reviewed their business plans, while major economies revised down growth prospects amid bleak data read-outs.
“US tariff policy is a serious negative shock for the world in the near term,” said Isabelle Mateos y Lago, group chief economist at French bank BNP Paribas.
“The US tariffs end-game may be further away and at a higher level than previously thought,” she said of blanket US tariffs, currently set at a baseline of 10pc.
