Latest news with #Asean+3MacroeconomicResearchOffice
The Star
4 days ago
- Business
- The Star
Chinese firms urged to deepen Asean roots as US cracks down on transshipments
Beijing should encourage its firms to deepen integration with Southeast Asian economies instead of using the region as a transshipment route to the US, according to a senior regional economist – as Washington threatens the export-reliant region with high tariffs. Transshipments drew attention earlier this month after the US announced tariffs on imports from Vietnam and 23 other trading partners. US President Donald Trump warned that imports diverted through Vietnam would face a 40 per cent tariff – double the 20 per cent levy on goods made in the Southeast Asian nation. 'Of course, [Southeast Asian authorities] would check the country of origin for products,' said Dong He, chief economist at the Singapore-based Asean+3 Macroeconomic Research Office (AMRO), on Tuesday, adding that some already have agreements with the US to do so. Chinese officials should also 'encourage their firms to become more deeply ingrained or integrated with local economies' in the Association of Southeast Asian Nations (Asean), He said. While the Chinese government seeks to protect its exports, businesses should have the autonomy to make long-term decisions about their role in local economies, which would also protect them from unpredictable tariff rates, he added. Imports from China face an average tariff rate of 42 per cent, according to Morgan Stanley estimates, while other Asian countries face rates of 25 to 40 per cent starting August 1. Since the US launched a trade war against China in 2018, Beijing has stepped up trade and investment with Asean countries. The goods trade between China and the bloc reached US$982.34 billion last year, up 7.8 per cent from 2023, customs data showed – consolidating the bloc as China's top trade partner. Vietnam, in particular, has drawn attention due to an influx of Chinese investment in its factories since Trump's first term – though it remains unclear exactly how Trump's transshipment clause will work in practice. Before Trump took office in January, officials in Malaysia and Thailand said they would not permit transshipments to the US. On Tuesday, the White House announced it had agreed a trade deal with Indonesia that would see the US reduce its proposed tariff rate to 19 per cent in return for Indonesia eliminating tariff barriers on a 'full range' of US industrial and food products. A similar deal has also been struck with the Philippines. Meanwhile, Trump said on his Truth Social account that his government had reached a separate deal with Japan to cut US tariffs to 15 per cent in exchange for Japan opening its market to more American products and investing US$550 billion in the US. Some Asian countries are also eyeing China's yuan currency as a partial 'backup' to the US dollar in case the dollar underperforms or becomes unreliable, as 'low' yuan interest rates could enhance its role as an 'important funding currency', He said. China has made progress in addressing 'legacy issues' in its economy this year, including property market woes and local government debt, the economist said. That headway gives it more space to develop sectors such as 'advanced services', he added. On Wednesday, AMRO's Regional Economic Outlook forecast China's growth at 4.5 per cent for this year and 4.1 per cent for 2026 – lower than April predictions of 4.8 per cent and 4.7 per cent, respectively. The Asian Development Bank, however, on Wednesday held China's 2025 growth forecast at 4.7 per cent and its forecast for next year at 4.3 per cent, unchanged from April projections. AMRO said the Asean+3 region – Southeast Asia plus China, Japan and South Korea – was projected to grow by 3.8 per cent in 2025 and 3.6 per cent in 2026, down from earlier forecasts of 4.2 per cent and 4.1 per cent, partly due to 'evolving US tariff measures'. - SOUTH CHINA MORNING POST
Qatar Tribune
5 days ago
- Business
- Qatar Tribune
Beijing urged to deepen ASEAN ties amid US tariff threat
Agencies Beijing should encourage its firms to deepen integration with Southeast Asian economies instead of using the region as a transshipment route to the US, according to a senior regional economist – as Washington threatens the export-reliant region with high tariffs. Transshipments drew attention earlier this month after the US announced tariffs on imports from Vietnam and 23 other trading partners. US President Donald Trump warned that imports diverted through Vietnam would face a 40 per cent tariff – double the 20 per cent levy on goods made in the Southeast Asian nation. 'Of course, [Southeast Asian authorities] would check the country of origin for products,' said He Dong, chief economist at the Singapore-based Asean+3 Macroeconomic Research Office (AMRO), on Tuesday, adding that some already have agreements with the US to do so. Chinese officials should also 'encourage their firms to become more deeply ingrained or integrated with local economies' in the Association of Southeast Asian Nations (Asean), He said. While the Chinese government seeks to protect its exports, businesses should have the autonomy to make long-term decisions about their role in local economies, which would also protect them from unpredictable tariff rates, he added. Imports from China face an average tariff rate of 42 per cent, according to Morgan Stanley estimates, while other Asian countries face rates of 25 to 40 per cent starting August 1. Since the US launched a trade war against China in 2018, Beijing has stepped up trade and investment with Asean countries. s The goods trade between China and the bloc reached US$982.34 billion last year, up 7.8 per cent from 2023, customs data showed – consolidating the bloc as China's top trade partner. Vietnam, in particular, has drawn attention due to an influx of Chinese investment in its factories since Trump's first termthough it remains unclear exactly how Trump's transshipment clause will work in practice. Before Trump took office in January, officials in Malaysia and Thailand said they would not permit transshipments to the US. On Tuesday, the White House announced it had agreed a trade deal with Indonesia that would see the US reduce its proposed tariff rate to 19 per cent in return for Indonesia eliminating tariff barriers on a 'full range' of US industrial and food products. A similar deal has also been struck with the Philippines.
The Sun
5 days ago
- Business
- The Sun
Domestic demand will remain key driver of Malaysia's economic growth: Amro
SINGAPORE: Malaysia's economy continues to demonstrate resilience in 2025, underpinned by strong domestic demand, robust investment activity and favourable labour market conditions, despite pressures from global trade tensions and policy uncertainty. Asean+3 Macroeconomic Research Office (Amro) chief economist Dong He stated that if the United States' reciprocal tariffs take effect from Aug 1 at the current rate of 25%, Malaysia's gross domestic product growth could fall from 5.1% in 2024 to 4.2% in 2025, and further to 3.8% in 2026. 'This reflects the direct impact on Malaysia's exports to the US, the indirect effects through intermediate goods sent to other countries destined for the US, and the broader slowdown in global trade growth. Nonetheless, domestic demand will remain the key driver of growth,' he told Bernama. He noted that front-loaded exports had supported economic momentum earlier in the year. At the same time, key sectors such as information and communication technology and manufacturing remain active, bolstered by data centre investments and industrial diversification. However, the outlook for the second half of the year and beyond remains clouded by external headwinds, particularly the outcome of ongoing US trade negotiations. To maintain momentum, He said Malaysia's policy priorities should include sustained diplomatic engagement with the US on trade issues, diversification of export markets, and greater emphasis on the services sector, which is typically less exposed to protectionist measures. He added that accelerating structural reforms remains essential, especially through the implementation of the New Industrial Master Plan 2030 and the National Energy Transition Roadmap. 'Regionally, the Johor-Singapore Special Economic Zone (JS-SEZ) could emerge as a strategic advantage, catalysing cross-border investment and innovation. 'US tariffs could enhance the JS-SEZ's appeal, particularly if Singapore faces much lower tariffs than countries like Vietnam and Mexico,' He said. He added that the strong commitment to collaboration demonstrated by both the Singaporean and Malaysian governments boosts confidence in the zone's prospects, particularly in a volatile global environment shaped by rising protectionism. 'Together, the zone's economic value proposition and political backing can attract foreign investors looking to establish a base in Asean,' He said. He noted that for the JS-SEZ to succeed, several challenges must be tackled, including cross-border movement of people and goods, infrastructure in southern Johor, wage gaps, labour shortages, and policy continuity, among others. 'If successful, the JS-SEZ can serve as a blueprint for future regional integration initiatives. For example, it could inspire similar cross-border economic zones between Thailand and Laos or Vietnam and Cambodia,' he said. – Bernama
Business Times
5 days ago
- Business
- Business Times
Amro cuts all Asean+3 economies' growth forecasts – except Vietnam's
[SINGAPORE] The Asean+3 Macroeconomic Research Office (Amro) trimmed its 2025 growth projections for all ten Asean member states as well as China, Hong Kong, Japan and South Korea – but spared Vietnam with a half-point upgrade. The downward revisions of between 0.2 and two percentage points reflect the impact of US tariffs set to take effect next Friday (Aug 1), said Amro in its latest quarterly update released on Wednesday. Earlier estimates in April did not include the impact of then-newly announced US tariffs, said the research organisation that monitors Asean+3 economies, a region that altogether contributes to more than 40 per cent of global economic expansion. Vietnam is the only economy that saw an improvement in its 2025 growth forecast to 7 per cent from Amro's earlier April forecast of 6.5 per cent. Amro chief economist He Dong said in a press briefing on Wednesday: 'The bumping up of Vietnam's growth is really a reflection of the much better outturn in the first half of the year, which automatically gave us the room to revise up the whole-year growth forecast.' The country notched a multi-year high gross domestic product growth of 7.52 per cent in the first half of 2025, driven by healthier domestic consumption, robust exports and strong improvement in the manufacturing and services sectors. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Acknowledging that Vietnam stands out as one of the most exposed to US tariffs, He maintained that the nation has the policy space to support economic activity if needed. The chief economist added that some of Vietnam's ongoing reforms to enhance its investment environment and improve infrastructure efficiency place it in a more resilient position looking ahead. 'Beyond the short term, what is more important is also to integrate much more deeply with other regional economies in attracting foreign direct investment,' he said. Asean's saving grace: Resilient domestic demand As a whole, Asean is now expected to grow 4.4 per cent in 2025, down from an earlier forecast of 4.7 per cent. Across the other major economies, Thailand faced a 0.8 percentage point cut in growth; the Philippines at 0.7 percentage point; Malaysia at 0.5 percentage point; Singapore at 0.4 percentage point; while Indonesia saw a 0.2 percentage point drop. On Indonesia, He noted that the largest South-east Asian economy is primarily driven by domestic demand, which means it is less open to international trade and thus less vulnerable. The chief economist added that China is Indonesia's largest export market and, hence, reasonably protected from the recent round of tariffs. 'Our recent consultations with Indonesia show that the economy is really doing very well and its domestic demand-driven growth momentum is there,' said He. 'Both monetary and fiscal policies have a lot of space to support the economy if necessary.' On the Philippines, Amro group head and principal economist Allen Ng said that its downward revision to 5.6 per cent from 6.3 per cent was primarily due to the projected impact from slower global growth. The economist explained the direct impact of US tariffs on the Philippines is weaker than in other regional economies due to its more domestic-centric economic structure, but a broader global slowdown will hit its exports, business sentiment and investment activities. Regardless, growth in the Philippines continues to be very robust, said Ng. 'It will continue to be driven by robust private consumption activities, given multiple factors including continued stable labour market conditions, slower inflation currently, and the expectation of robust remittances going forward,' he noted. A bleaker 2026 Amro's estimates for 2026 are not much rosier. Impact from the wide-ranging US tariffs is projected to be more significant next year, said the international organisation, particularly for regional economies that face higher duties and rely more on external demand. The region's growth forecasts for 2026 also took a beating – only Vietnam and Myanmar had their estimates bumped up, while the rest saw cuts. Vietnam is now expected to grow at 6.5 per cent, down from an earlier forecast of 6.2 per cent while Myanmar should grow at 1.5 per cent, lower than April's estimate of 1 per cent. Overall, however, Amro noted that continued strength in domestic demand and sustained external demand for electronics and tourism, is expected to continue to underpin regional growth. Taming price pressures On the other hand, inflation prints are looking better. Headline inflation for the overall Asean+3 region is projected to remain 'low and stable' at 0.9 per cent in 2025 and 1 per cent in 2026. This is down from an earlier April estimate of 1.7 per cent for both years. 'This outlook reflects stable commodity prices, including the normalisation of oil prices following the temporary volatility during the brief escalation of the Iran-Israel conflict,' said Amro. Softer food prices and weaker global growth are expected to further ease inflationary pressures. Additionally, subdued consumer demand and the ongoing reallocation of productive capacity in China are also likely to limit any increase in regional inflation, said the international organisation. Silver linings All in all, significant risks lie ahead, said Amro's He. 'If tariff measures continue to escalate, global trade could face substantial disruptions,' said the chief economist. 'The outlook gets more challenging if we add additional risk factors, such as tighter financial conditions and commodity price spikes, in light of continued geopolitical tensions.' Regardless, He believes tariff and policy uncertainties from the US provide an opportunity for much tighter intra-regional integration. 'Asean+3's diversity, in my view, is one of its greatest assets,' said He. 'Economies in this region are at different stages of development with varied resource endowments and comparative advantages (and) can forge more integrated supply chains and production networks.' He concluded: 'This diversity, when leveraged through coordinated policies and integration initiatives, will transform potential vulnerabilities into collective resilience for the region.' He succeeded Dr Khor Hoe Ee as the organisation's chief economist on Jun 9. Dr Khor, whose term ended on May 26, held the position from 2016 to 2025. Amro's next update is scheduled for October 2025.
Bangkok Post
5 days ago
- Business
- Bangkok Post
Chinese firms urged to deepen Asean roots as US cracks down on transshipments
ALAMEDA — Beijing should encourage its firms to deepen integration with Southeast Asian economies instead of using the region as a transshipment route to the United States, according to a senior regional economist - as Washington threatens the export-reliant region with high tariffs. Transshipments drew attention earlier this month after the US announced tariffs on imports from Vietnam and 23 other trading partners. US President Donald Trump warned that imports diverted through Vietnam would face a 40% tariff - double the 20% levy on goods made in the Southeast Asian nation. "Of course, [Southeast Asian authorities] would check the country of origin for products," said Dong He, chief economist at the Singapore-based Asean+3 Macroeconomic Research Office (AMRO), on Tuesday, adding that some already have agreements with the US to do so. Chinese officials should also "encourage their firms to become more deeply ingrained or integrated with local economies" in the Association of Southeast Asian Nations (Asean), he said. While the Chinese government seeks to protect its exports, businesses should have the autonomy to make long-term decisions about their role in local economies, which would also protect them from unpredictable tariff rates, he added. Imports from China face an average tariff rate of 42%, according to Morgan Stanley estimates, while other Asian countries face rates of 25 to 40% starting Aug 1. Since the US launched a trade war against China in 2018, Beijing has stepped up trade and investment with Asean countries. The goods trade between China and the bloc reached US$982.34 billion last year, up 7.8% from 2023, customs data showed - consolidating the bloc as China's top trade partner. Trump announces fresh tariffs Vietnam, in particular, has drawn attention due to an influx of Chinese investment in its factories since Trump's first term - though it remains unclear exactly how Trump's transshipment clause will work in practice. Before Trump took office in January, officials in Malaysia and Thailand said they would not permit transshipments to the US. On Tuesday, the White House announced it had agreed a trade deal with Indonesia that would see the US reduce its proposed tariff rate to 19% in return for Indonesia eliminating tariff barriers on a "full range" of US industrial and food products. A similar deal has also been struck with the Philippines. Meanwhile, Trump said on his Truth Social account that his government had reached a separate deal with Japan to cut US tariffs to 15% in exchange for Japan opening its market to more American products and investing $550 billion in the US. Some Asian countries are also eyeing China's yuan currency as a partial "backup" to the US dollar in case the dollar underperforms or becomes unreliable, as "low" yuan interest rates could enhance its role as an "important funding currency", He said. China has made progress in addressing "legacy issues" in its economy this year, including property market woes and local government debt, the economist said. That headway gives it more space to develop sectors such as "advanced services", he added. On Wednesday, AMRO's Regional Economic Outlook forecast China's growth at 4.5% for this year and 4.1% for 2026 - lower than April predictions of 4.8% and 4.7%, respectively. The Asian Development Bank (ADB), however, on Wednesday held China's 2025 growth forecast at 4.7% and its forecast for next year at 4.3%, unchanged from April projections. AMRO said the Asean+3 region - Southeast Asia plus China, Japan and South Korea - was projected to grow by 3.8% in 2025 and 3.6% in 2026, down from earlier forecasts of 4.2% and 4.1%, partly due to "evolving US tariff measures".
