It has been reported that President Trump has accelerated the trade war to the next level with his plans to introduce sweeping "reciprocal tariffs" on both allies and competitors. Officials said the levies will be imposed country by country, but this could mean raising rates on imports to match levels other countries apply to US products. This latest move could risk further retaliation by major trading countries, potentially disrupting global supply chains, driving up costs for businesses everywhere and creating heightened uncertainty for the global economy. Trump acknowledged that Americans may feel economic "pain" from his sweeping tariffs, but argued it would be "worth the price" to secure the country’s interests.
Among experts from around the globe who responded to Trump’s latest move, Tim Harcourt, chief economist at the University of Technology Sydney’s Institute for Public Policy and Governance, said, “Continued retaliation will be of concern to world markets. Ultimately, trade wars hurt everyone — workers, consumers, farmers and the global economy, particularly if the effects are widespread.
“If the US can (use tariffs as an economic weapon), obviously other countries are going to do it, too. So, even if the effects are short-lived, the effect of what you can do with tariffs for non-economic purposes could be quite concerning for international relations.”
In addition, Assoc Prof of Economics Chang Pao-Li of the Singapore Management University (SMU) told CNA the world economy tends to repeat its cycle every century. Despite decades of efforts to strengthen multilateral cooperation, the current wave of anti-globalisation and political conflicts is akin to those of the 1920s to 1930s, which was followed by a period of trade liberalisation in the 1950s to 2000s, coordinated by the GATT and WTO,” she said.
Analysts have said that fears surrounding globalisation — as demonstrated by growing protectionism, anti-immigration sentiments, the rise of populist parties and protests against international institutions — have intensified and are likely to persist for the foreseeable future.
However, Asian Development Bank's (ADB) has a positive outlook, saying Southeast Asia is expected to grow by 4.7% in 2025, with the Philippines, Vietnam and Cambodia growing fastest.
For Thailand, political stability is a key for further economic growth to compete with neighbouring countries, but it is facing many hurdles: trust and confidence in government, corruption, high cost of living, high household debt, unemployment and, above all, the division among the coalition government on the issue of constitutional reform. Many now wonder how long the coalition government will survive.
The government is also facing the ongoing problems of government debt and a budget deficit to solve. According to the Bank of Thailand, Thailand's seasonally-adjusted-household debt remains high at 89.8% of GDP, with over 28% classified as non-productive loans such as loans for other personal consumption. Data from the National Credit Bureau also indicates that as of September 2024, total non-performing loans reached 1.2 trillion baht, reflecting a year-on-year increase of 14%.
According to the IMF and World Bank, Thailand’s economy is projected to grow by 2.7% in 2025, which is much lower than neighbouring countries. Inflation remains low but is expected to increase gradually and return to the authorities’ target range 1-3%. The outlook remains highly uncertain with risks tilted to the downside. Thailand's weak growth prospects, high household debt and reliance on consumption underscore the urgent need to boost investment and empower small and medium-sized businesses and startups, it said.
Furthermore, the World Bank pointed out problems that need to be solved. The deleveraging cycle and stricter lending by commercial banks are believed will slow consumption further. Their report went on to say goods export growth is expected to be moderate this year due to softer demand from key trading partners, including the United States and China.
They also said global trade policy uncertainty posed a significant threat, given Thailand’s openness to trade and participation in global value chains.
For ASEAN to cope with the turmoil of Trump’s trade war, regional integration to deepen economic integration through initiatives like the ASEAN Economic Community (AEC) will facilitate trade and investment flows. The rapid growth of the digital economy, including e-commerce and fintech, will create new opportunities for businesses and drive innovation. Plus, ongoing investments in infrastructure projects will improve connectivity and support economic activity.
Analyst from the Singapore Management University (SMU) said, overall, the ASEAN economy in 2025 is expected to continue its growth trajectory, driven by strong fundamentals and ongoing regional integration efforts. The ability of ASEAN to capitalize on its strengths will determine its economic prospects in 2025 and beyond. ASEAN's economic growth in 2025 will likely be influenced by a combination of global and regional factors. While the region has strong growth potential, it will need to navigate challenges such as geopolitical risks, climate change and structural reforms to sustain long-term growth.
Hence, ASEAN nations, particularly Thailand, need unity to ensure their interests are considered by larger global powers. ASEAN needs a coordinated policy strategy to defend the benefits from free and open trade while also preparing for the possibility of punitive US tariffs.
