Trump’s tariffs: Asean urged to tap East Asia’s US$10 trillion forex reserves, assets

By diversifying its market investment sources, Asean can be less reliant on American capital, a former Malaysian central banker says

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Asean nations should look to tap East Asia’s huge foreign exchange reserves to boost their stock markets, a former Malaysian central banker says. Photo: Reuters

Published: 6:30pm, 9 Apr 2025

Asean countries should tap US$10 trillion of foreign reserves held by China, Japan and South Korea to stabilise their stock markets that have been roiled by Washington’s punishing tariffs, according to a former Malaysian central banker, as global investors lost trillions of dollars in the ensuing turmoil.

Economic ministers from the Association of Southeast Asian Nations (Asean) are due to meet in Kuala Lumpur on Thursday to discuss a unified response to the tariffs.

More than half of the bloc’s 10 members have been slapped with levies of between 24 per cent and 49 per cent on their exports to the US, with the aggressive tariff moves by President Donald Trump threatening to derail the region’s economic growth.

Malaysia has warned that the 24 per cent tariff imposed by Washington on the country will weigh on its economy over the medium to long term given that the US is its largest export market.

Asean countries could get some reprieve from Trump’s tariffs by forging closer financial ties with East Asia’s major economies, said Andrew Sheng, a former Bank Negara Malaysia official who was involved in banking regulations, at the Asean Investment Conference in Kuala Lumpur on Wednesday.

China, Hong Kong, Japan and South Korea hold combined net foreign exchange reserves and assets of about US$10 trillion, which present ample opportunity for Asean members to tap the funds in East Asia and grow their stock markets, according to Sheng.