Export-dependent Singapore has a strong warning for the rest of the world: The damage from a prolonged trade war will be severe.
While South-east Asia has found some benefits from the deepening trade hostilities between the US and China, the risk of a protracted conflict should have everyone worried about the state of the global economy, said Trade and Industry Minister Chan Chun Sing.
"In the medium term, some countries benefit and some countries lose," he said in an interview with Bloomberg Television.
"What is more worrying for everyone is that the entire global economy loses confidence."
That would have "a huge impact" on financial markets, and could slow down the entire level of economic activity, said Mr Chan. "Then I think it will impact everyone negatively."
It is still early days and that worst-case scenario has not materialised yet, he added.
UPHOLDING GLOBAL TRADING SYSTEM
We need to work with like-minded partners to uphold the global trading system, to continue to have the free-trade agreements either bilaterally or multilaterally, to make sure that the global trading system remains open, free and rules-based.
TRADE AND INDUSTRY MINISTER CHAN CHUN SING
But it is a worry for a small, open economy like Singapore's, where exports amounted to 173 per cent of gross domestic product last year. The city-state has found itself in the crossfire as its No. 1 and No. 4 trading partners duel with tariffs, threatening to upend global supply chains.
With the global economy already facing a potential cyclical downturn in the next few years, that would be made worse by a trade-related plunge in sentiment, Mr Chan said. "If that coincides with what many people are expecting in terms of a global downturn because of the technicalities, then I think we will be in for a rough ride."
There are already troubling signs. Surveys from China to Indonesia showed a decline in manufacturing sentiment last month, signalling weaker activity stemming from the US-China tensions. Singapore's Purchasing Managers' Index plunged to its lowest in more than two years.
Mr Chan said Singapore's economic fundamentals are "still all right" and fluctuations in the data can be expected. "The concern is the longer-term structural shifts."
For now, the economy is still growing solidly, with economists forecasting expansion of about 3.2 per cent this year, compared with 3.6 per cent last year.
Singapore's warnings come as the world's financial elite prepare to gather in Bali for the World Bank and International Monetary Fund's annual meeting next week.
JPMorgan Chase & Co is predicting an all-out trade war, with the United States slapping higher tariffs on all Chinese imports. Bank of America Merrill Lynch sees a slowdown in China and weaker export growth spilling over to the rest of Asia.
To weather that storm, Singapore sees two tasks at hand: keeping the global trading system open and working domestically to make the economy more resilient.
"We need to work with like-minded partners to uphold the global trading system, to continue to have the free trade agreements either bilaterally or multilaterally, to make sure that the global trading system remains open, free and rules-based," Mr Chan said.
A collapse of that system could return the global economy to "where we were 100 years ago, near the Great Depression era when everybody thought that it was better for them to close their borders and work in isolation", he added.
Internally, Singapore needs to continue to "recycle our factors of production efficiently from the less-productive sectors to the more-productive sectors", including through retraining workers for newer markets, and welcoming foreign workers who will contribute to the more productive parts of the labour market, he said.