According to the Asian Development Bank's chief economist Albert Park, the United States' recent implementation of extensive tariffs poses a threat to both U.S. and global economic growth. Unlike previous trade tensions between the U.S. and China that led to manufacturing relocation to Southeast Asia, these new tariffs are expected to slow down trade activities across the entire region.

Park emphasized that the impact of the tariffs could hinder U.S. economic growth and potentially result in the Federal Reserve adjusting policy rates downwards. The broad scope and intensity of the new tariffs may not only impact East Asian export opportunities but also constrain production within the region.

The tariffs introduced by the U.S. have significant implications for various trading partners, including Southeast Asian nations. Countries like Vietnam, Laos, and Cambodia are facing substantial tariff rates. China, which is already facing economic challenges, will bear a 34% tariff in addition to a 20% levy imposed earlier this year, totaling 54%.

The heightened tariffs are anticipated to have adverse effects on China's economic prospects. China, in response, may focus more on boosting domestic consumption and enhancing trade with countries other than the United States. Southeast Asian economies are also expected to encounter challenges due to the tariff barriers they face, limiting their capacity to absorb redirected trade and affecting growth opportunities.

Park further expressed concerns about the potential for capital outflows from Southeast Asia, citing how foreign investors often withdraw from riskier markets during uncertainties like these tariffs. The economic and geopolitical uncertainties stemming from the tariffs could exacerbate market instability in the region.