The region faces a disproportionate impact from the US tariff measures, as 13 out of the 14 member economies are subject to some of the highest effective tariff rates in the April 2 announcement, with a trade-weighted average estimated at 26 per cent excluding China.
These rates remain fluid and will likely evolve further in the coming months. These tariffs and the uncertainty generated by the constant shifts in policies are expected to weaken trade momentum, disrupt supply chains, and increase financial market volatility, the report noted.
ASEAN+3 economies are more resilient and diversified today than during past global shocks and better positioned to navigate the unfolding shock from US reciprocal tariffs, the ASEAN+3 Regional Economic Outlook 2025 said.
They possess ample policy space to cushion near-term shocks.
Many of them have the fiscal capacity to deliver targeted support to vulnerable sectors and sustain domestic demand.
Prior to the announcement of the ‘Liberation Day’ tariffs, AMRO had projected the region to grow above 4 per cent in 2025 and 2026, supported by robust domestic demand, recovering investment, and low, stable inflation.
However, the US tariff measures have introduced considerable uncertainty. Under the initial Liberation Day scenario, regional growth could slip below 4 per cent in 2025 and weaken further to 3.4 per cent in 2026.
These preliminary projections are subject to significant uncertainties, as the US administration continually adjusts its tariff measures in response to market reactions and counter measures by trading partners.
ASEAN+3 economies possess ample policy space to cushion near-term shocks. Many governments have the fiscal capacity to deliver targeted support to vulnerable sectors and sustain domestic demand, an AMRO press release said citing the report.
Central banks in the region have room to ease monetary policy in view of the low and well-anchored inflation rates, and can deploy macro-prudential tools and liquidity facilities to safeguard financial stability.
The region is now supported by a more diversified export market as well. The region’s share of exports to the United States has declined steadily over the years. Exports to the US now make up just 15 per cent of gross exports, compared to about 24 per cent in 2000.
Deepening intra-regional trade and rapidly expanding domestic markets have reduced dependency on any single export market.
Continued progress in regional integration and trade diversification will further strengthen the region’s ability to weather global turbulence, the AMRO report added.
Fibre2Fashion News Desk (DS)