Afzanizam Rashid of Bank Muamalat said entering into “too many trade agreements” might be risky, leading to confusion for businesses and countries involved. “As it is both bilateral and multilateral free trade agreements are already complex,” he said.

Nazari Ismail of Universiti Malaya said a new regional bloc, while possible, would not shield the region from trade shocks if companies in the region continued to depend heavily on trade with the US.

“If the US continues to impose high tariffs on countries in this region, the sudden drop in exports and earnings could still be severe, potentially leading to a regional recession,” he said.

The two economists were commenting on a recent proposal by noted economist Woo Wing Thye who suggested an East Asian buffer bloc backed by the European Union, to shield its members from unpredictable tariff policies, particularly from US president Donald Trump.

Afzanizam said “it might be wiser to make full use of existing agreements” such as the Asean-China free trade agreement and the Asia-Pacific regional pact known as RCEP involving Asean, China, Japan, South Korea, Australia and New Zealand. The RCEP is the world’s largest free trade agreement,

Afzanizam said many small and medium enterprises still lacked awareness of existing trade agreements or the capacity to make use of the agreements.

“If utilisation is low, then more effort is needed through outreach programmes to help them understand how to tap into these agreements to access overseas markets,” he said.

Afzanizam said the purpose of trade deals was to make it easier for businesses to expand and be more productive. “I’m not sure if establishing a new economic bloc would truly help mitigate the impact of the US-China tariff war.”

Nazari called for a focus on boosting long-term competitiveness against other companies in the region, and to build resilience in the domestic economy. “One key way to do this is by reducing debt levels in our economy. High indebtedness will weaken resilience over the long term.”

On Wednesday, Woo had argued that Asean alone was “too small to stand on its own” as a region to withstand shocks from Trump’s tariffs.

He said Asean needed to join hands with stronger allies such as Japan and South Korea to form a neutral economic bloc which could grow to twice the size of the US or China by 2045.