ASEAN Resilience in a Protectionist World: A Competitiveness Analysis provides insight into the ASEAN perspective amid a global shift towards rising protectionism, growing trade uncertainty, technological disruptions from the rise of AI, and climate-consciousness. These developments have prompted the reconfiguration of global supply chains and compelled ASEAN to reassess its position within them. Combining in-depth analysis of government policies with quantitative assessment of the latest trade data, this report seeks to shed light on how external headwinds in the global economy intersect with responses from both governments and industries as they adapt to the evolving global trade landscape.

Chapter 1 provides an overview of ASEAN’s present economic landscape, describing the key features of the regional economies and their most recent growth trends. ASEAN continues to draw in significant greenfield investment from the rest of the world and enjoys its status as a major manufacturing and commodities hub. In recent years it has made the expansion of the digital economy into a cornerstone of its long-term competitiveness strategy, but geopolitical tensions and the increasing use of protectionist measures by the United States (US) have prompted a strategic reorientation of trade and digitalisation, including greater emphasis on diversification and resilience.

Chapter 2 examines ASEAN’s industry and government responses to the imposition of tariff barriers by the US. Caught in a situation of triangular dependence where the ASEAN economies are reliant on both the US as an export market and China as a source of intermediate inputs, the most highly exposed export sectors have had to adapt. Sectoral responses have had to combine short-term mitigation strategies with longer term structural adjustments. These involve policies stimulating domestic demand as a supplement to shrinkage in the US market, and stronger government support for strategic sectors. Other plans for localisation, export diversification and upgrading are also in the works, but responses have to be balanced against diplomatic and affordability concerns. The chapter illustrates the range of possible responses using the case studies of Vietnam’s automobile sector and Malaysian solar PV. Vietnam is an example of direct and targeted government intervention, involving the lowering of tariff rates against the US as a conciliatory gesture paired with the promotion of production localisation. In contrast, Malaysia’s response focused primarily on leveraging existing climate policy to stimulate domestic demand and diversifying export markets.

Chapter 3 features the results of the 2025 General and Digital Competitiveness Index analyses. Regional rankings have remained broadly similar with previous years and reveal persistently tiered outcomes across the six economies. Singapore remains the regional top performer, Thailand and Malaysia provide a middling performance, followed by the Philippines, Indonesia and Vietnam. The persistent gaps highlight disparities in institutional and developmental maturity that overlap across both General and Digital Competitiveness rankings. However, the ASEAN countries have each in their own way been making an effort to realise the developmental potential of their respective economies. Indonesia has been rapidly expanding digital infrastructure with the Palapa Ring project, now moving into the Integrasi phase, while Thailand has sought to improve its attractiveness to foreign investors and strengthen a selection of strategic sectors through the “Ignite Thailand” scheme.

As the global economy settles into its new state of uneasy fragmentation, ASEAN’s resilience in the face of such uncertainty is dependent on its ability to remain agile and adaptable to new challenges. A precondition for this is the region’s ability to promote greater inclusivity, sustain multilateral cooperation among its members, and diversify its trade relations by strengthening ties with other economies that share an interest in preserving open and rules-based trade. Domestically, the ASEAN economies need to upgrade their capabilities, integrate their supply chains and improve the quality of their human capital.

By GOH, Yuh Xian