Countries can build new trade links, resilience amid US tariffs and unpredictability: President Tharman

Tie-up between the CPTPP and EU to help nations meet challenges cited as possibility

- Annabelle Liang Correspondent

Tariffs imposed by the US have been a setback for Asia, and countries have to start thinking about creating opportunities and building resilience, said President Tharman Shanmugaratnam on Oct 16.

"If the US tariffs are reconfiguring trade, we've got to reconfigure trade as well," he said at a panel in Washington on shaping economic policies amid a shifting global landscape. "We do have agency. The middle powers and the smaller nations of the world have agency."

President Tharman, who is on a working visit to the US, cited the possibility of a tie-up between the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) - which groups 11 Pacific Rim economies and Britain - and the European Union, to help countries ride out current challenges.

"Just think of what's possible... If the CPTPP and the EU start collaborating with each other, that's about 42 per cent of world trade. If Asean and the EU start collaborating with each other, that's more than a third of world trade," he said.

In his remarks, Mr Tharman noted that many Asian countries outside China were facing a double whammy of US tariffs and the diversion of Chinese exports from the US to other countries. He also cited two other challenges that could affect Asia's growth: the onshoring of production into both the US and China, and the thinning out of the US-China trade corridor, which a lot of Asia's growth has rested on.