KUALA LUMPUR: Rising US tariffs are expected to affect growth across Asia-Pacific (Apac), according to S&P Global Ratings’ latest economic update.
The tariffs, which target sectors such as automobiles, pharmaceuticals and semiconductors, are anticipated to put a strain on regional growth as trade relations continue to evolve.
S&P Global Ratings chief economist for Apac Louis Kuijs said the tariffs will have a significant impact, especially on countries heavily reliant on trade with the United States.
“As for Apac, we anticipate more tariffs, which are expected to affect growth, particularly through their impact on exports, investments, and overall economic uncertainty,” he said during the S&P Updates Economic Forecasts for Apac Economies webinar today.
There will also be some countries, such as the Philippines, Singapore, Australia and New Zealand, that are not expected to be significantly impacted by the tariffs directly, he said.
“The impact on these countries is expected to be minimal, as they do not face significant tariffs or have substantial bilateral trade surpluses with the US,” he added, but they will still experience indirect impacts.
“We also need to consider that when Chinese exporters face more challenges in the US market, they will focus more on selling within the region. This shift will place additional pressure on local exporters, particularly in some Southeast Asian markets,” Kuijs said.
He added that despite rising tariffs and global trade tensions, the agency has only slightly revised its growth forecast for Apac economies, projecting 4.1% growth in 2025 versus 4.4% in 2024 due to strong regional domestic demand.
“An important takeaway is that while the US tariff actions are challenging Apac economies, the robustness of domestic demand should prevent growth from faltering significantly,” he said. – Bernama
