The U.S. fired the first shot on Friday with tariffs on $34 billion worth of Chinese goods from 818 product categories. In response, China implemented retaliatory tariffs on some imports from the U.S., said its foreign ministry, according to a Reuters report.
Taiwan, South Korea and Southeast Asian countries such as Singapore and Malaysia are among the most export-dependent economies — which make them especially vulnerable when global trade is under threat.
"Given the trade open-ness and exposure to the supply chain, there will no respite whatsoever for Malaysia, Singapore, South Korea, and Taiwan in this tail risk scenario," said Taimur Baig, chief economist of Singapore's DBS Bank.
He estimated that 0.8 percent could be shaved off Singapore's growth in an event of "an all-out trade war," defined as 15 percent to 25 percent tariffs on all products traded between the world's two largest economies. The Southeast Asian city-state is expected to grow 3 percent this year.
Taiwan and Malaysia could see their expected growth rates this year — of 2.8 percent and 5 percent, respectively — lowered by 0.6 percent, Baig added. South Korea, meanwhile, could lose 0.4 percent from its estimated 2.9 percent growth in 2017, according to the economist.
The two countries at the front and center of the escalating trade frictions, China and the U.S., could see a 0.25 percent downside to their growth prospects this year, Baig estimated.