The Asian Development Bank (ADB) has revised its growth estimates for 2025 and 2026, reducing them by 0.1 and 0.2 percentage points respectively, due to the negative impact of U.S. tariffs on regional exports.
Despite China facing the highest effective tariff burden at 42.1% and ongoing uncertainties in negotiations with Washington threatening the region, the bank maintained its growth forecasts for China at 4.7% in 2025 and 4.3% in 2026.
India, “hit by steep tariff increases,” saw its predictions lowered by 0.2% for 2025 and 0.3% for 2026.
In Southeast Asia, the reduction was more pronounced: the growth forecast stands at 4.3% for both 2025 and 2026, down from the previously projected 4.7%. If new sector-specific U.S. tariffs are implemented, Cambodia, Vietnam, and Malaysia will bear the brunt.
“Developing Asian economies, particularly the People’s Republic of China, were more affected than the rest of the world,” highlights the ADB’s semi-annual report.
The document notes that the region now faces average tariffs 28.1 percentage points above the levels agreed upon in the World Trade Organization and free trade agreements.
In addition to the tariffs introduced during Donald Trump’s administration, the bank warned about global uncertainty caused by announcements of U.S. bilateral agreements still lacking definitive terms, the potential for new taxes on pharmaceutical products and semiconductors, and the possibility of revising existing tariffs.
Exports from developing Asian economies increased by 8.1% in the first half of 2025, driven by rising U.S. imports ahead of new tariffs, boosting regional growth to 5.4% in the first six months of the year, compared to 4.9% during the same period in 2024.
