Increasing trading within region will help Asean build resilience against global trade tensions

JUST when we thought the two largest countries in the world were close to an agreement to resolve their trade war, tensions have re-escalated. The United States raised the tariff rates of US$200 billion worth of imports from China to 25 per cent from 10 per cent effective on May 10. China retaliated and seems to have upped the ante on its rhetoric in response.

Financial markets reacted negatively, reflecting concerns that nobody wins in a trade war and the risk that it could derail global growth. The Asean region is not insulated, and will likely suffer more from rising risks of protectionism and de-globalisation. After all, Asean is home to some of the most open economies in the world including Singapore, Malaysia and Thailand, and is heavily reliant on exports.

Despite the dimming outlook as a result of the trade tensions, the Asean region has scope to respond to this threat and turn it into an opportunity to strengthen its own resilience over the long run, regardless of when we get a clear resolution in the trade conflict.