MANILA - A World Bank economist on Thursday said a trade war between the world's two biggest economies was not imminent, but added that if it does happen, it will affect the Philippines and other countries in the Association of Southeast Asian Nations (ASEAN).

Sudhir Shetty, World Bank East Asia and Pacific chief economist said that so far the US and China have just issued threats and counter-threats about imposing tariffs.

"Those tariffs have not yet gone into effect, there's a waiting period in the US, and China, in turn, said it will await actual imposition before going forward," Shetty said.

But he also warned that should a trade war break out, it will create complications for trade in Southeast Asia.

Shetty said that about two thirds of the products that the US was targeting with additional tariffs are connected to a value chain that stretches across ASEAN countries including the Philippines, Malaysia and Vietnam.

He said products like electrical equipment and machinery, though assembled in China, use materials from several countries in the region.

"There will be a knock-on effect as a result of these supply chains."

Shetty noted this may be critical to the region as the success of Developing East Asia is based on open trade.

He added the imposition of additional tariffs will also inject uncertainty into the global economy that has just recovered from 2016.

"This is bad for global trade. In 2017, global trade grew at its fastest pace since 2010. It's likely to grow at roughly the same pace in 2018. But if additional uncertainty as a result of these threats of tariffs, that could slow global trade."

Shetty said slower global trade will be particularly bad for the region which is highly dependent on external trade for growth.

The World Bank raised its growth forecast for East Asia and the Pacific for 2018 saying the region, which includes China, will expand 6.3 percent this year, a notch up from 6.2 percent forecast in October.

The lender sees the Philippines growing 6.7 percent this year and next year.

Shetty however also said the forecast did not take into account a potential trade war between the world's two largest economies.

The World Bank suggested bolstering regional trade through mechanisms such as the ASEAN Economic Community, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the China-led Regional Comprehensive Economic Partnership so that the region can try to insulate itself against the threat of a trade war.

"Will that completely offset the impact of a possible trade war? Probably not, but it could certainly mitigate against the worst effects of those developments," Shetty said. - with a report from Reuters