How to Beat Trump Tariffs? IMF urges Asia to integrate regional trade to reduce vulnerability, global financial shocks

Global financial body, the International Monetary Fund (IMF), on Friday, October 24, 2025, urged the Asian nations to integrate regional trade and also lower the non-tariff barriers between the countries to reduce the vulnerability to US tariffs and global financial shocks, reports the Reuters news agency. “If Asia integrates more within the region, it itself offers you a buffer against external shocks,” Krishna Srinivasan, director of the department of Asia and the Pacific, told the news agency. According to the agency report, trade in Asia has been fueled by China’s emergence as the supply chain hub for goods produced around the world. IMF said in its economic outlook report for Asia that this factor makes trade in Asia vulnerable to the impact of US-China trade tensions and the Trump tariffs. The news release also highlighted that trade tensions between the US and China have fueled an investment boom in artificial intelligence (AI) and intra-regional trade in Asia. How can Asian countries beat Trump tariffs? According to the agency report citing the IMF, the Asian countries can beat the tariffs imposed by US President Donald Trump by removing trade barriers and promoting regional trade integration. These moves could potentially diversify export markets for the countries, reduce costs and offset some of the headwinds from the tariff shocks, the IMF said. Srinivasan told the news agency that Asia is highly integrated in intermediate goods trade, with 60% of total exports made in the region, compared to 30% of final goods exported in the region. IMF’s APAC director also emphasized that this shows the dependence of these nations on the larger European or American market. Can lowering non-tariff barriers help Asian countries? The International Monetary Fund (IMF) said lowering non-tariff barriers could yield significant benefits, as they were raised during the COVID-19 global pandemic and remain pervasive in Asia, according to the agency report. Srinivasan highlighted a “very positive” trend of some countries voluntarily reducing their non-tariff barriers as part of trade talks with the United States amid the global trade war. If Asian countries boost their regional trade integration, Asia could see gross domestic product (GDP) rise by nearly 1.4% in the medium term, and the Association of Southeast Asian Nations economies by as much as 4%, Srinivasan told the news agency. “There is a silver lining in that some countries, which should have liberalized anyway, are now liberalizing,” he said. As for Asia’s economic outlook, IMF expects the region’s economy to expand at a rate of 4.5% in 2025, indicating slower growth compared to 4.6% in 2024. However, according to the agency report, the IMF’s estimates are 0.6% higher than their previous level of April 2025.