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, 24 October 2025, urged the Asian nations to integrate regional trade and also lower the non-tariff barriers among the countries to reduce the vulnerability to US tariffs and global financial shocks, reported the news agency Reuters.

“If Asia integrates more within the region, that itself provides you a buffer against external shocks,” IMF's Asia and Pacific Department Director, Krishna Srinivasan, told the news agency.

According to the agency report, the trade in Asia has been fueled by China emerging as the supply chain hub for goods which are produced across the globe.

IMF, in its economic outlook report for Asia, said that this factor makes trade in Asia vulnerable to the hit from the US-China trade tensions and the Trump tariffs. The news report also highlighted that the trade tensions between the US and China have fostered an investment boom in artificial intelligence (AI) and the 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 can potentially diversify the 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 the total exports made in the region, compared to 30% of final goods which are exported made in the region. IMF's APAC Director also highlighted that this shows the reliance of these nations on the bigger European or US market.

Can lowering non-tariff barriers help Asian nations?

The International Monetary Fund (IMF) said that lowering non-tariff barriers could deliver sizable benefits as these were increased during the COVID-19 global pandemic and currently 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 the trade talks with the United States amid the global trade war.

If Asian nations boost their regional trade integration, Asia could see a gross domestic product (GDP) rise of nearly 1.4% over 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 had to liberalise anyway, are now liberalising,” he said.

On the Asia economic outlook front, IMF expects that the region's economy is set to expand at a rate of 4.5% in 2025, marking a slower growth when compared to 4.6% in 2024. However, according to the agency report, IMF's estimates are 0.6% higher than their previous level of April 2025.