The Asian Development Bank’s annual meeting is fast approaching. Between May 1 and 5, central bank governors, finance ministers and policy wonks from across Asia will get together in Fiji – and a troupe of bankers will inevitably follow them.
Between the conference panels and cocktail parties, there is plenty to talk about. The possibility of a trade war between China and the US will be the most obvious topic of discussion. The two countries have imposed tariffs on each other’s goods – $250 billion of Chinese goods are affected – leading to fears of escalation.
But talks between the two countries appear to be bearing fruit: US president Donald Trump has extended a March 1 deadline that would have seen tariffs increase from 10% to 25%.
How bad would a trade war be for Asia? The ADB’s own research presents a mixed picture. A report it published in December found that a full-scale trade war would shave just over 1% off China’s GDP and 0.2% off the US economy over a period of two to three years, ignoring other sources of growth. But it also found that some developing Asian economies could enjoy a positive impact from the trade war.