Southeast Asia will maintain robust economic growth despite rising tensions as tit-for-tat tariffs between the US and China stoke fears of a damaging trade war, regional finance ministers said Friday.
“We sounded a warning about the risk of rising protectionism and the possibility of the trade disputes deteriorating,” Singapore Finance Minister Heng Swee Keat told reporters after a meeting of ASEAN finance chiefs.
However detailed briefings by economists from the World Bank, International Monetary Fund and the private sector on ASEAN’s prospects were consistent with projections for strong growth, said Heng, who chaired the meeting.
The 10-member ASEAN bloc was estimated to have grown by an “impressive” 5.1 percent last year and is expected to outpace most other regions this year, Heng said.
“As to the question whether the risk of trade disputes would then undermine investment sentiment and so on -- those are things that we really have to watch,” he said.
“It is too early for us to conclude and revise growth projections. These are risk scenarios that we always have to watch out for but our central scenario remains pretty benign.”
With tensions between the US and China stoking fears of a full-blown trade war, Heng stressed that no one would emerge a winner.
“We need to send a strong signal that trade tensions -- and if it escalates into something worse -- will not benefit anyone. It will be very negative for everyone involved,” he said.
US President Donald Trump on Thursday vowed to slap an additional $100 billion in tariffs on Chinese goods on top of $50 billion worth of items already identified to be hit with punitive taxes.
China has also unveiled plans for retaliatory import duties on politically-sensitive US exports, including soybeans, aircraft and autos and launched a challenge at the World Trade Oganization.
Heng said the ASEAN ministers had agreed to push ahead with trade liberalisation but take steps to help those who are negatively affected by globalization.
“We must continue to have very strong commitment to trade and to openness to the globalization process,” he said.
ASEAN covers a region of 650 million people, grouping Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.