Strategic rise: An illustration indicating regional trade. Asean’s importance globally has only strengthened in recent years as member countries doubled down on strategic autonomy and boosted their supply chains.
THE 47th Asean Summit in Kuala Lumpur took place amid a raft of uncertainties: global economic growth pressure and volatility, changing supply chain dynamics and shifting geopolitical alignments.
It made sense then that officials at the summit were eager to unlock deeper economic cooperation, and lift Asean global profile.
The timing is ideal. Regional collaboration and regulatory cooperation, multi-country agreements and comprehensive knowledge sharing have never been more important.
This is particularly the case for Asean, a region with strong macroeconomic fundamentals, positive economic growth outlook, and resilient trade performance despite challenges.
Asean’s gross domestic product (GDP) is projected to grow 4.9% in 2025, according to BofA Global Research, fuelled in part by strong domestic demand that will cushion the impact of external headwinds.
The bloc’s trade performance has also withstood global shocks: thanks to a combination of intra-Asean trade demand, which accounts for 21.4% of total trade in the region, as well as trade with China, the United States and the European Union, showed data from the Asean Economic Integration Brief.
Asean’s importance globally has only strengthened in recent years, as member countries doubled down on strategic autonomy, boosted their supply chains, and made embedding sustainability and digital transformation a core part of their economic policies.
The countries have also been major beneficiaries of global supply chain shifts due to their strategic location, cost advantages and manufacturing capabilities as companies looked to diversify their production base.
Investment fillip
Tying them all together is Malaysia.
It used its 2025 Asean chairmanship to set the tone for regional priorities, pushing inclusive growth, sustainability, and economic resilience, rather than just headline GDP expansion.
By homing in on the theme of collaboration and sustainability, it is emphasising that smaller Asean economies don’t get left behind but can benefit from supply chain shifts and green field investments.
It has also positioned itself strongly for new foreign investment and trade opportunities.
Perhaps one of the most consequential developments from the summit was Malaysia’s reciprocal trade agreement with the United States.
As part of that, Malaysia committed to providing significant preferential market access for US industrial goods exports, for products ranging from chemicals and electronic equipment to poultry, pork and rice.
The United States, in return, maintained its 19% tariff on Malaysian goods, but granted exemptions to more than 1,700 product lines.
The two also sealed a critical minerals cooperation, with Malaysia agreeing to impose no restrictions on the sale of rare earth magnets to US companies – a move set to enhance supply chain resilience between Asia and the United States.
For Malaysia, the immediate payoff is clear: better market access and sectoral tariff relief for strategically important exports, with the critical mineral agreement signalling investor interest in its battery and clean-energy supply chains.
Sectoral tariff exemptions reduce short-term risk for investors in capital-intensive industries, improving project bankability for greenfield and brownfield investments.
More broadly, Asean’s ongoing commitment to digital trade frameworks and sustainable economic cooperation creates exciting opportunities for investors in renewables, battery value chains, electric vehicle components and data centres, among others.
Malaysia’s existing manufacturing base, port infrastructure and energy efficiency make it a logical destination for investment flows.
Going global
Lifting Asean’s global profile through the summit could prove a useful tool, too.
In addition to the traditional 10 Asean country representatives (with Timor-Leste joining as the 11th member this year), plus representatives from China, Japan, South Korea, the United States, Australia, India, New Zealand and Russia, Malaysia hosted the presidents of Canada, South Africa and Brazil – a move that could create new trade and investment corridors.
Malaysia in May also hosted the inaugural Asean-GCC-China Summit, aimed at straightening ties with key trading partner China and the six-member Gulf Cooperation Council.
Bolstering its relationship with GCC countries could lead to new foreign investment flows into Malaysia, as the country also carefully balances its relationship with key Asean players, and global partners like China and the United States.
Asean’s deeper integration agenda and some tariff relief from the United States create a conducive investment environment in higher-value manufacturing, green industries, and the digital economy.
Malaysia is a key engine for growth and investors are bullish on its prospects, with its role in bridging the development divide and making Asean’s integration more meaningful adding to its appeal.
If the country keeps the momentum going, the Asean Summit 2025 will be remembered not only for Malaysia’s sharp diplomacy skills but also for measurable boosts in trade, jobs and global investment.
Gautam Puntambekar is Malaysia country executive at Bank of America. The views expressed here are the writer’s own.
