Asian countries should diversify their trading partners and boost domestic demand to ensure they can ride out the current global trade war, the head of the Asian Development Bank (ADB) said on Tuesday.
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The export-driven economies of countries in the region were stronger than in the past, but there was no room for complacency as the United States persisted with its strategy of high tariffs on almost every country in the world, Masato Kanda, the ADB’s president, said in an interview.
“This is a time for Asia to boost domestic demand, pursue sound economic policies and diversify industries and trade partners,” Kanda said.
In addition to tariffs on China that have more than doubled the cost of Chinese imports into the US, other Asian countries such as Vietnam and Thailand that rely on exports have been hit with some of the highest proposed US tariffs.
Meanwhile, a “sell US” trend that has taken hold since the Trump administration launched its tariff offensive has resulted in gains in Asian currencies, further hurting the competitiveness of exporters in the region.
Kanda, who was formerly Japan’s top currency official, said wild swings in markets were another reason for countries in the region to diversify their economic bases.
“What we can do is to protect the regional economies against external shocks and build resilience to future shocks,” he said.