MAS chief economist urges Asia countries to remain agile, avoid retaliation

He urged policymakers to double down on regional trade integration.

Asia's open economies must remain agile and not succumb to tit-for-tat retaliation, said Edward S. Robinson, Deputy Managing Director (Economic Policy) & Chief Economist, Monetary Authority of Singapore, during his welcome remarks at the 12th Asian Monetary Policy Forum.

Robinson made the statement amidst growing concerns over rising global protectionism, noting that retaliatory tariffs can undermine trade efficiency and trigger negative spillover effects, especially for export-dependent economies in Asia.

“For Asia's small open economies, global tariffs pose a major challenge. With trade dependencies in the region sometimes exceeding 100% of GDP, the ripple effects may be severe: reduced production, and possibly, renewed capital outflows, raising the prospect of a destabilising loop between the real and financial sectors,” Robinson said.

Robinson argued that protectionist measures, such as tariffs, often fail to correct trade imbalances and instead lead to higher costs for households and businesses. 

“Both the targeted and tariff-imposing economies suffer,” Robinson said, pointing out that structural forces like technological change and shifting consumption patterns, not trade deficits, are behind the decline in manufacturing employment.

Rather than retaliate, he urged policymakers to double down on regional trade integration, citing services and digital sectors as fa ocus, and adopt structural policies such as workforce reskilling to prepare for shifts in the global economy. 

Such efforts, he said, could help the region weather near-term challenges and position it for longer-term resilience.