The issue of trade remains a topic for the Trump Administration with several countries, especially China. And a leading regional financial institution says that ongoing dispute will soon begin to have a wider impact.
The Asian Development Bank says trade conflict between the United States and China could have a steep regional cost.
The ADB calls itself “an international development finance institution dedicated to reducing poverty in Asia and the Pacific through loans.” It closely monitors trends that could have broader impacts, especially among developing economies.
The bank expects overall regional growth of 6-percent this year, falling to 5.8 percent next year.
The biggest threat: increased tariffs hurting the extensive multinational supply chains that have grown across the region. That’s where smaller economies could get choked in a broader dispute between the United States and China.
As for the Chinese economy, it was not long ago that the Beijing government considered anything below double-digit economic growth to be disappointing. This year, the ADB says China will have 6.6 percent growth, falling to 6.3 percent next year.
But the bank also says there are some trade flows that are less affected by disruptions between the United States and China — especially as trade within Asia has increased in recent years.
The ADB’s chief economist told Agence France Presse “Asia used to be a global factory and everyone viewed Asian economies as suppliers.”
But the world has changed, and he adds “more than half of the global middle class is living in Asia.”