**Introduction** The Association of Southeast Asian Nations (ASEAN) is exposed to global tariff policies and supply chain shocks because its economies are highly trade-dependent and deeply integrated into global value chains. The recent expansion in the coverage and scope of tariff measures, together with more frequent policy-related supply disruptions, increases the risk that external shocks are transmitted through trade and investment channels into ASEAN production and export activity. **Risks facing ASEAN from tariffs and supply chain shocks** **1.** **Rising tariff coverage and trade diversion** The scope of tariff measures affecting global trade has expanded substantially. By the end of May 2025, tariff increases and similar import measures in force covered approximately US$4.6 trillion of world imports, equivalent to 19.4% of global import value, compared with 12.5% at the end of 2024[1]. This rapid increase in tariff coverage heightens exposure for ASEAN economies that specialize in intermediate manufacturing, as sudden changes in applied tariffs can alter sourcing decisions and relative costs across global value chains. During the mid-October 2024 to mid-May 2025 monitoring period, newly recorded trade-restrictive measures covered an estimated US$2.7 trillion in trade value[1]. The scale of tariff coverage raises the likelihood of spillovers into ASEAN exports, including in cases where ASEAN economies are not the primary focus of the measures. **2.** **Exposure to broad-based tariff measures** Recent tariff actions have increasingly taken the form of measures applied across trading partners rather than narrowly targeted interventions. These include 10% across-the-board tariffs introduced in April 2025, alongside the continued use of sectoral tariffs such as 25% duties on steel and aluminum justified under national security authorities.² For ASEAN economies, such measures raise export costs and policy uncertainty because ASEAN firms are frequently embedded as suppliers within multinational production networks, broad tariff measures can reduce demand indirectly by prompting firms to reconfigure sourcing and production locations. **3.** **Policy-driven supply chain volatility** Supply chain disruptions are increasingly associated with policy uncertainty rather than purely physical bottlenecks. Short-term resilience in early 2025 reflected, in part, shipment front-loading ahead of anticipated tariff increases, with trade momentum expected to weaken as higher tariffs take effect[3]. For ASEAN producers, these dynamics contribute to greater volatility in orders, inventories, logistics utilization, and financing conditions. The scale of global trade amplifies these effects. In 2024, world trade in goods and commercial services reached US$32.2 trillion, with services accounting for 27.2% of total trade, the highest share since 2005[4]. Disruptions affecting trade-enabling services such as transport, logistics, and finance therefore compound the impact of tariff-related and goods-sector shocks on ASEAN export activity. **4.** **Weakened trade governance and market fragmentation** The expansion of tariff measures and industrial policy instruments has occurred alongside weaker multilateral enforcement. The persistence of trade-restrictive measures in the absence of timely resolution increases uncertainty for economies that depend on rules-based market access rather than bargaining leverage[1]. The continued use of local content requirements and other selective protectionist measures raises compliance costs and contributes to market fragmentation for firms operating across multiple jurisdictions[5]. For ASEAN, this weakens the predictability that has historically supported long-term investment in export-oriented manufacturing and increases exposure to abrupt policy changes in major markets. **Conclusion** Global tariff escalation and recurring supply chain disruptions pose material risks for ASEAN by weakening external demand, disrupting production networks, and altering investment location decisions. The expansion of tariff coverage across a significant share of world trade increases the likelihood that policy shocks are transmitted into ASEAN economies through trade and investment channels. These risks are reinforced by policy-driven supply chain fragmentation and weaker multilateral enforcement, which together increase uncertainty for highly trade-dependent economies. Without stronger diversification and more predictable trade governance, ASEAN’s exposure to externally generated tariff and supply chain shocks is likely to remain elevated.
