The current wave of economic fragmentation, characterised by geopolitical uncertainties, regionalised trade blocs, localised supply chains, and tariff wars, challenges the future of global trade and economic integration. Underscoring this challenge, the World Bank has forecast a subdued global growth rate of just 2.3% for 2025, significantly below the pre-pandemic average of 3.7%.
Against this backdrop, the recent US trade policy, involving increased tariffs on imports and targeted barriers against China, poses a dual threat to Asean. Firstly, it reduces Asean exports to the US. Secondly, it could exacerbate China's overcapacity, which potentially overflows to Asean markets.
