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Singapore's Monetary Authority (MAS) has urged Asian economies to stay agile and avoid retaliatory tariffs, warning such actions could disrupt economic stability. Edward Robinson, MAS Deputy Managing Director and Chief Economist, highlighted at a monetary policy conference that tit-for-tat trade measures would worsen the growth-inflation trade-off and complicate central banks’ efforts.
Robinson cautioned that protectionism and import taxes hinder resource allocation, inflate consumer prices, and reduce choices for households. "Both the targeted and the tariff-imposing economies suffer," he emphasized, stressing that Southeast Asia should resist protectionist instincts and instead push for deeper regional trade integration, particularly in digital services and investments.
Despite Singapore’s free-trade agreement and ongoing trade deficit with the U.S., Washington has imposed a 10% baseline tariff on Singaporean goods. Other Southeast Asian nations are facing the threat of even steeper tariffs, although these have been delayed until July, with a provisional 10% rate currently in effect.
The pressure comes as Singapore’s economy shows signs of weakness. The city-state reported a 0.6% contraction in Q1 2025, raising concerns about a technical recession even before the U.S. tariffs take full effect. The MAS responded by easing monetary policy in both January and April. Robinson reaffirmed on Thursday that the current stance remains appropriate given present conditions.
With global trade tensions escalating, Robinson’s message is clear: regional economies must avoid short-term reactions that could lead to long-term damage. Strengthening intra-Asian trade cooperation and maintaining open market principles could provide the resilience needed to weather external shocks, especially from rising U.S. protectionism.
This strategic stance underscores the urgency for Asian economies to recalibrate trade strategies and reinforce multilateralism in an increasingly fragmented global economy.
