US tariffs to weigh on Asia-Pacific growth, says S&P Global

RISING United States tariffs are forecast to exert downward pressure on economic growth across the Asia-Pacific (APAC) region, according to S&P Global Ratings' latest economic update.

The tariffs, which primarily target key sectors such as automobiles, pharmaceuticals, and semiconductors, are expected to strain regional economies as trade relations continue to shift.

The imposition of these tariffs is set to affect countries within APAC that are heavily dependent on trade with the US, particularly in terms of exports and investment flows.

S&P Global Ratings' Chief Economist for APAC, Louis Kuijs, highlighted the significant ramifications of the tariffs.

"As for APAC, we anticipate more tariffs, which are expected to affect growth, particularly through their impact on exports, investments, and overall economic uncertainty," he said during the S&P Updates Economic Forecasts for APAC Economies webinar.

However, not all countries within the region are expected to be equally affected. Kuijs noted that some economies, including the Philippines, Singapore, Australia, and New Zealand, are unlikely to experience significant direct impacts from the US tariffs.

"The impact on these countries is expected to be minimal, as they do not face substantial tariffs or have major trade surpluses with the US," he explained. Despite this, these nations are still likely to experience indirect effects from the global trade tensions.

Kuijs also pointed out that Chinese exporters facing mounting difficulties in the US market will likely shift their focus towards regional markets within APAC.

"This shift will place additional pressure on local exporters, particularly in some Southeast Asian markets," he added, underscoring the ripple effect of the US-China trade tensions.

Despite the growing tariff pressures and global trade uncertainties, S&P Global has only slightly revised its growth projections for the APAC region, forecasting a 4.1% expansion in 2025, down from 4.4% in 2024.

This is largely due to the resilience of domestic demand in the region, which is expected to support growth despite external challenges.

"An important takeaway is that while the US tariff actions are challenging APAC economies, the robustness of domestic demand should prevent growth from faltering significantly," Kuijs concluded. - April 2, 2025