IMF Warns U.S.-China Tensions Pose Major Risk to Asia’s Growth
Singapore — The International Monetary Fund (IMF) has slightly lowered its economic growth forecast for Asia, cautioning that renewed U.S.-China trade tensions could deliver a sharp blow to a region deeply integrated into global supply chains.
“Economic activity in the region has been better than expected, despite Asia bearing the brunt of U.S. tariffs,” said Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department. However, he warned of “significant risks to the region’s outlook.”
“When global risks materialize, Asia will lose a lot,” Srinivasan said. “This is a region highly intertwined with global supply chains, so when tensions rise between major economies like the United States and China, the impact on Asia is magnified.”
Trade frictions between the two economic giants have intensified after Beijing tightened restrictions on rare earth mineral exports, prompting U.S. President Donald Trump to threaten a 100% tariff hike on Chinese goods starting November 1.
Despite these risks, the IMF’s latest outlook projects Asia’s economy to grow 4.5% in 2025, slightly down from 4.6% in 2024 but 0.6 percentage points higher than its April estimate. Growth is expected to ease to 4.1% in 2026, reflecting persistent global trade headwinds.
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