Marcos concerned over impact of US tariffs

Philippine President Ferdinand R. Marcos, Jr. expressed concern over the impact of the US tariffs on the global economy, warning of possible “shrinkage in economic activity.”

Speaking at a press conference following the 46^th ASEAN Summit in Kuala Lumpur on Tuesday evening, Mr. Marcos said the US tariffs imposed on Association of Southeast Asian Nations (ASEAN) members will have a significant impact on the region’s economies.

“If the tariff regime is unilaterally imposed, there will be a real collapse. It has a global effect, and it is not going to be a good one. There will be, I believe, a shrinkage in economic activity. I hope not. I hope I’m wrong,” he said.

Southeast Asia is bracing for the impact of the US reciprocal tariffs, which have been paused until July. Six ASEAN countries are facing tariffs of 32% to 49%, while the Philippines has been slapped with a 17% tariff, the second lowest in the region.

Even if the tariff is rolled back, Mr. Marcos said there is already a permanent effect on the economy that cannot be undone.

Southeast Asian leaders on Tuesday evening issued a statement expressing “deep concern” over the Trump administration’s tariff policies.

“We express deep concern over the recent announcement by the United States to impose unilateral tariffs and their potential impact on our economies,” according to a statement by the chairman of the ASEAN on Tuesday evening.

“The uncertainties arising from these tariffs and potential retaliation could heighten volatility in both capital flows and exchange rates.”

However, Southeast Asian leaders said they will continue their dialogue with the US, “and commit not to impose any retaliatory measures in response to US tariffs.”

“We also emphasized the urgency of diversifying trade beyond traditional markets,” according to the statement.

Meanwhile, Mr. Marcos said uncertainty remains as countries are awaiting developments in their negotiations with the US.

“We don’t know what will happen between now and July when the 90 days run out,” he said.

Mr. Marcos also called for stronger regional coordination and deeper economic integration within ASEAN.

“If we cannot sell to these markets anymore, then let’s sell to each other’s markets. The best, most solid way forward is to be a reliable partner for each other in ASEAN,” he said.

The Philippine president said he chatted with Chinese Premier Li Qiang during the ASEAN Summit on the issue of US tariffs.

“I asked him, ‘Premier, what do you think?’ He says, “Well, we do not want any of this.” They don’t want this (trade) war. And I said, ‘We’re very worried because China is the biggest economic driver in the region,’” Mr. Marcos said.

The US and China earlier this month agreed to temporarily cut the reciprocal tariffs for 90 days. The US slashed the extra tariffs it imposed on Chinese imports to 30% from 145%, while China’s levies on US imports will be reduced to 10% from 125%.

Negotiations

Meanwhile, Southeast Asian leaders reached an understanding on Tuesday that any bilateral agreements they might strike with the United States on trade tariffs would not harm the economies of fellow members, Malaysia’s premier Anwar Ibrahim said.

Mr. Anwar, the current chair of the ASEAN, said there was consensus during the ASEAN Summit that any deals negotiated with Washington would ensure the interests of the region as a whole were protected.

The ASEAN meeting came at a time of global market volatility and slowing economic growth, and amid uncertainty over a trade war that has ensued since US President Donald J. Trump’s announcement of sweeping “Liberation Day” tariffs.

“While proceeding with bilateral negotiations…, the consensus rose to have some sort of understanding with ASEAN that decisions should not be at the expense of any other country,” said Mr. Anwar, who on Monday said he had written to Mr. Trump requesting an ASEAN-US meeting on the tariffs.

“So, we will have to protect the turf of 650 or 660 million people,” he said of ASEAN.

ASEAN, a region with a combined gross domestic product of more than $3.8 trillion, is in a precarious position in relation to the United States, which is the biggest market for the region’s exports, which are key drivers of its growth.

The 10-member bloc on Tuesday released a five-year strategic plan to better integrate its economies, citing challenges that meant “carrying on business as usual will not suffice.”

Tuesday’s meetings also included an economic gathering of leaders of the ASEAN, Gulf countries and China.

At a dinner event late on Tuesday, China’s Mr. Li urged Gulf and ASEAN countries to remove trade barriers and expand liberalization in the face of rising protectionism and unilateralism.

“We all need to firmly maintain the multilateral trading system with the World Trade Organization as the core and promote the creation of a stable and orderly international market environment,” he said. — CMAH and Reuters