Despite escalating global trade tensions, Asia will continue to be a hub of growth opportunities, according to Singapore’s Deputy Prime Minister Gan Kim Yong. Speaking at CNBC’s CONVERGE LIVE event in Singapore on Wednesday, Gan acknowledged the disruptions caused by rising tariffs and trade wars but stressed that Asia’s economic outlook remains positive.
“Even if some of us in Asia may not be directly affected, the impact of rising tariffs and trade wars could cause major disruptions to supply chains, slow down trade and investment flows, and significantly set back the growth of the global economy,” Gan said.
His remarks come in the wake of growing global trade challenges, including recent moves by the U.S. under President Donald Trump, who imposed significant tariffs on goods from Canada, Mexico, and China, with more measures expected. Gan highlighted the anxiety in Asia regarding Trump’s tariffs on the U.S.’s three largest trading partners and his plans for additional tariffs, which have affected trade relations globally.
Asia’s Economic Growth
Despite the current uncertainty, Gan expressed optimism about Asia’s economic trajectory. He pointed out that Asia’s economy is projected to expand from around 50% of global GDP today to approximately 60% by 2030. Southeast Asia, where Singapore is located, is expected to become the fourth-largest economy in the world by the same year.
“We have good reason to remain optimistic,” Gan emphasized, underscoring Asia’s resilience and growth potential.
Open, Integrated, and Innovative Trade
Gan called for Asia to remain an “open, integrated, and innovative area for trade” to sustain its positive momentum. He noted the role of the ASEAN Trade in Goods Agreement (ATIGA), which has been in effect since 2010. ATIGA has successfully eliminated import duties on almost all tariff lines in six of the 10 ASEAN countries, including Singapore. The remaining countries have reduced their import duties to between 0% and 5% on about 99% of tariff lines.
ATIGA is also being updated to adapt to new challenges, such as the digital and green economy, and to improve supply chain resilience. Gan explained that these updates aim to reduce trade barriers and strengthen intra-ASEAN trade, helping businesses mitigate risks from external disruptions and protectionist measures.
Wider Regional Trade Agreements
Looking beyond Southeast Asia, Gan highlighted the broader network of trade agreements within Asia, including six ASEAN Plus Free Trade Area agreements with countries like Australia, New Zealand, China, and India. He also pointed to the Regional Comprehensive Economic Partnership (RCEP), which he described as the “largest free trade agreement in the world.”
RCEP, which includes the 10 ASEAN countries along with China, Japan, South Korea, Australia, and New Zealand, has already eliminated tariffs on 92% of products. Gan emphasized that these overlapping trade agreements reflect Asia’s collective commitment to maintaining an open, inclusive, and rules-based multilateral trading system.
