Visitors look at the city horizon from a park in Kuala Lumpur on September 30, 2021.
Mohd Rasfan | AFP | Getty images
Emerging markets have been found between a rock and a difficult place in an intensive commercial war, apparently forced to choose between China and the United States, but there is another way: they are being supported.
“Southeast Asian countries, including Malaysia, have to negotiate with the United States to create some soft landing point,” Onk Kian Ming, former Deputy Minister of Commerce and International Industry of Malaysia, told CNBC. “But at the same time, it does not prevent us from working with other countries, not to fuck the United States, but to benefit ourselves.”
Southeast Asia is particularly vulnerable to a growing global commercial war. Goldman Sachs has reduced its growth forecasts for emerging Asian markets, saying that smaller export -oriented economies are the most exposed to tariff agitation.
The Bank’s 2025 GDP prognosis for Vietnam is now 5.3%, significant lower than consensus estimates or 6.5% cited by Goldman. The bank expects Malaysia to grow by 3.8% (compared to 4.7%) next year, and Thailand will expand by 1.5% (compared to 2.7%).
The nations of Southeast Asia were among the most affected by the “day of liberation” of the president of the United States, Donald Trump. They must be affected with rates of up to 49% after a temporary reduction of 90 days to 10% in all countries (Chinese bar) is raised.
The region faces a difficult equilibrium act, since the US is not their only strategic partner, China, also plays a crucial role for the medium -term growth and development objectives for many emerging Asian economies, according to Lavanya Venkateswaran, S
Chinese president, Xi Jinping, visited Vietnam, Malaysia and Cambodia earlier this month in an effort to promote Beijing as a stability pillar and boost ties within the region. He also requested the global south “to defend the common interests of developing countries.”
And it seems to be happening.
Onm Secretary Trade and Development (UCTAD), Rebeca Grynspan, told CNBC Squawk Box this month that intra -regional trade is growing.
“An interesting indicator that we have since the last year, in this century, is that the South-South trade has already grown faster than the North North trade,” he said. “Then, the acceleration of South-South trade, I think, will take a new dynamism due to the new commercial policy of the United States”
Anwar Ibrahim, Prime Minister of Malaysia and current rotating president of the ASEAN, echoed this feeling, asking for more trade and greater economic integration within the region in an opening speech at the ASEAN investment summit in early April.
There are no easy solutions
Although there are no “easy solutions”, emerging economies are expected to try different approaches in an attempt to mitigate the impact of US tariffs, according to Lavanya Venkateswaran, an OCBC economist.
“In the short term, the authorities will have to take advantage of fiscal and monetary policy tools to provide cyclic support to the affected sectors of the economy. For the medium term, the authorities understand the need to diversify commercial and investment partners,” Sheid.
Help that the so -called strategy “China+1” still remains in the medium term, he added. Many economies of Southeast Asia oriented to export were great beneficiaries of the strategy during the first Trump administration, receiving economic impulses as companies moved the production of China to their coasts.
In Cambodia, for example, according to the World Bank data, Exports of Cambodian goods and services represented 55.5% of their Gross Domestic Product in 2018, before Trump imposed his first Chinese tariffs: by 2023, this figure had increased to 66.9%.
Miguel Chanco, Chief of Emerging Economists of Asia at Pantheon Macroconomics, agreed, To say that emerging markets are more attractive than China as long -term export manufacturing centers.
“It should also be taken into account that tariffs do nothing to eliminate the competitiveness of the labor cost of EM Asia Ex China (versus China) economies, which will continue to be a great long -term sale point for multinationals,” he told CNBC by email. “The new supply chains won are created during the night.”
