Asia Can Boost Economic Resilience Amid Surging Trade Tensions

April 24, 2025-Stronger regional economic ties can help build resilience during a time of growing policy uncertainty
As the global economic system is being reset, US tariffs are the highest in a century-with some of the steepest aimed at Asia. A leader in global trade, Asia accounted for nearly 60 percent of global growth in 2024. However, the region's successful growth model, based on trade liberalization and integration into value chains, faces mounting challenges.

While some levies have been paused, tensions between the United States and China have escalated significantly, as has trade policy uncertainty in general.

Against this backdrop, the outlook for Asia and the Pacific has dimmed. In our reference forecast, we project growth will slow to 3.9 percent this year from 4.6 percent last year. The downgrade of 0.5 percentage point, our sharpest since the pandemic, reflects weaker global demand, reduced trade, tighter financial conditions, and heightened uncertainty. We project 4 percent growth in 2026, also slower than previously forecast.