President Ferdinand Marcos Jr. said the Philippines remains committed to deepening trade engagements not just with the Association of Southeast Asian Nations (Asean) and the Gulf Cooperation Council (GCC), but also with China.
During a media interview in Kuala Lumpur, Malaysia, before returning to the Philippines, Marcos said he and Chinese Premier Li Qiang conveyed their respective concerns about the economic risks posed by the US tariffs.
On the sidelines of an Asean-GCC-China meeting, Marcos said Li told him China does not want to have anything to do with America’s trade war.
Marcos said China plays a critical role in the region’s economic stability and how fluctuations in its economy directly affect Asean nations doing trade with China, including the Philippines.
“As we navigate an increasingly complex global landscape, the Philippines remains firmly committed to deepening our engagement with partners across the Gulf, China, and our fellow member states,” he said.
“If you put these groups together … just start with the GCC and Asean … That is a very important economic bloc,” Marcos said.
Economically feasible
John Paolo Rivera, a senior researcher from the Philippine Institute of Development Studies, said such economic bloc may be “economically feasible.”
Asean, GCC and China represent a large share of the world’s population, capital, and trade, Rivera noted, saying it could help Asean and the Philippines “diversify markets amid rising US protectionism.”
Established in 1967, the 10-member Asean bloc aims to promote economic and security cooperation among its members. It counts Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam as members.
GCC is a regional organization composed of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The council aims to deepen and strengthen existing ties, connections, and cooperation among Arab nations.
After the US, China is the world’s second largest economy in terms of nominal gross domestic product.
Marcos said Asean member states were in a “consensus on the importance of strengthening regional cooperation and interdependence” to help ensure continued economic stability in the region.
While Asian economies are strong and performing well at present, the unilateral tariff could lead to the “shrinking” of economic activities and the economy in general, Marcos said.
But the impact of higher tariffs on one nation could affect the rest of the nations in the regions due to existing investment and trading ties, the president said.
US President Donald Trump had decided to raise the tariff on all imports under the “Reciprocal Trade and Tariffs” policy, which resulted in duties of 49 percent for Cambodia, 46 percent for Vietnam, and 17 percent for the Philippines. Its implementation was paused for 90 days, which is set to end in July.
China, meanwhile, was slapped with a 125 percent hike in tariff.
Economic pragmatism
Rivera said there is a need for all concerned to understand that today’s economic reality “is nuanced.”
He explained that it is nuanced in such a way that Asean is veering toward economic pragmatism rather than political alignment.
“Given China’s central role in the region’s trade and production networks, deeper engagement is economically rational,” he said.
“However, this does not necessarily translate to geopolitical allegiance. The Philippines must tread carefully to maintain strategic autonomy while leveraging economic opportunities,” Rivera added.
For Marcos, the way forward for Asean is to rely on one another.
He urged Asean member states to be one another’s reliable partners with greater interdependence amid America’s trade war with its supposed trade partners.
