AMRO urges unity among ASEAN+3

The ASEAN+3 region Macroeconomic Research Office (AMRO) is urging member nations to remain united and refrain from resorting to anti-dumping measures against each other as the region realigns its exports away from the United States, following the announcement of higher tariffs, to intraregional trading partners.

There are fears that China, which exports about $450 billion worth of goods to the US, may redirect those products to its ASEAN neighbors. As such, AMRO chief economist Hoe Ee Khor advised, “it is important for countries to avoid anti-dumping measures... and to stay united” as he also acknowledged that “China is the biggest investor in the region with its electric vehicles, batteries and renewable energy products” and that “China can play a major role in diversifying in new industries.”

Khor reiterated that with the ASEAN+3 region as the “fastest growing in the world, with a rapidly growing middle class... it is important the region avoids taking anti-dumping measures against each other.”

AMRO yesterday held an online press conference on the release of its annual flagship report, the ASEAN+3 Regional Economic Outlook (AREO) 2025, highlighting the region’s resilience and policy capacity to withstand unprecedented global trade shocks following the US administration’s sweeping tariff announcement on April 2.

The imposition of much higher US tariffs, AMRO noted, marks a sharp escalation in trade protectionism and has heightened uncertainty far exceeding market expectations. “The announcement of elevated and broad-based tariffs by the US, and the developments since, have added significant layers of complexity to the ASEAN+3 region’s outlook,” according to Khor.

Khor, however, expressed doubt that the Trump administration’s objective to bring back manufacturing to the US will be achieved as it will face the high cost of productivity in the US, resulting in higher prices of goods which will not make them more competitive.

“Nevertheless,” he assured, ASEAN+3 economies today are more resilient and diversified than during past global shocks and better positioned to navigate the unfolding tariff shock.”

The ASEAN+3 region, it was pointed out, faces a disproportionate impact from the US tariff measures. Out of the 14 member economies, 13 countries are subject to some of the highest effective tariff rates announced by the US, with a trade-weighted average estimated, according to AMRO group head for regional surveillance Allen Ng, of 28 percent, excluding China.

The Philippines faces a 17 percent tariff, much lower compared to those slapped on Vietnam, Cambodia, Thailand and Indonesia. However, Ng clarified that with the Philippines less dependent on manufacturing and more on services, the tariff impact would be less.

The announced US tariff rates remain fluid and will likely evolve further in the coming months. The higher tariffs and the uncertainty generated by the constant shifts in US trade policies are expected to weaken trade momentum, disrupt supply chains and increase financial market volatility.

Still, the ASEAN+3 regional outlook is underpinned by resilient fundamentals, the AMRO economists said. Prior to the announcement of the “Liberation Day” tariffs, AMRO had projected the region to grow above four percent this year and in 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 four percent in 2025 and weaken further to 3.4 percent 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.

While the trade shocks will weigh on ASEAN+3, the region is entering this period from a position of relative strength and resilience, according to the two economists.

They stressed that 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. Central banks in the region have room to ease monetary policy in view of the low and well-anchored inflation rates, and can deploy macroprudential tools and liquidity facilities to safeguard financial stability.

Our own Bangko Sentral ng Pilipinas has already chosen to lower key policy rates to support the local economy.

The AMRO economists said that over the years, regional economies have become more balanced, with domestic demand and intraregional trade emerging as key drivers of growth. Moreover, the region is now supported by a more diversified export market. The region’s share of exports to the US has declined steadily over the years. Exports to the US now make up just 15 percent of gross exports, compared to about 24 percent in 2000.

Deepening intraregional 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 two AMRO economist sees a reconfiguration of trade that would result in China and the ASEAN changing its form of engagement and may involve more foreign direct investments, “creating a more regional economy.”

According to Ng, “Reinvigorating structural reforms and enhancing productivity are critical to unlocking the region’s untapped growth potential. Accelerating digitalization, embracing green transitions, and boosting productivity, can help ASEAN+3 sustain resilient, high-quality growth.” Key medium to long-term priorities include upgrading industrial capabilities, diversifying into renewable energy industries and markets, narrowing investment gaps, strengthening institutional capacity, increasing services productivity, and deepening integration in areas such as services and digital trade.

Despite today’s uncertain environment, Khor said, the region has demonstrated its ability to endure and adapt. He concluded that “ASEAN+3 has proven its remarkable resilience time and again in the face of global shocks. In this volatile trade landscape, unity and coordinated action will be essential. There are no winners in a trade war — but together, we can emerge.”