**Introduction** Developing countries are adapting to increased trade fragmentation by reducing dependence on concentrated markets, improving operational competitiveness within reconfigured supply chains, and strengthening institutional capacity to meet more demanding trade and regulatory requirements. Policy responses focus on diversification, trade facilitation, and compliance capacity to preserve market access under conditions of heightened trade uncertainty[1][2]. **How developing countries are responding to trade fragmentation** **1.** **Diversifying trade and investment exposure** As trade policy uncertainty and unilateral measures have increased, developing countries have sought to reduce vulnerability to abrupt market access disruptions by diversifying export destinations, investment partners, and trade arrangements. Policy uncertainty weakens trade growth and disproportionately affects emerging and developing economies with high export concentration[1][3]. Regional and bilateral trade agreements therefore play a growing role as risk-management mechanisms, offering alternative access channels when multilateral enforcement is less effective and when large markets adopt trade-restrictive measures[2]. **2.** **Competing for supply-chain reallocation** Trade fragmentation has increased competition among locations for production and sourcing as firms adjust supply chains in response to geopolitical and policy risks. Location decisions increasingly favor economies with predictable customs procedures, efficient logistics, and stable operating conditions[1][4]. Economies with stronger trade facilitation and regulatory reliability have been better positioned to attract manufacturing and assembly activity, even as global foreign direct investment growth remains subdued[3]. These adjustments depend primarily on institutional performance rather than large fiscal incentives. **3.** **Strengthening compliance capacity as fragmentation shifts to non-tariff measures** Trade fragmentation increasingly operates through non-tariff requirements, including standards, documentation, security screening, and sustainability-related rules. In response, developing countries are strengthening customs procedures, digital trade systems, border management, and firm-level compliance capacity to limit exclusion from export markets[2][5]. These adjustments support continued participation in lead-firm supply chains, where traceability, documentation, and procedural reliability have become baseline conditions for market access. **Conclusion** Developing countries are adapting to trade fragmentation through diversification of trade relationships, improvements in trade facilitation and logistics, and stronger compliance capacity for non-tariff requirements. These adjustments support continued market access and participation in reconfigured supply chains as trade becomes more fragmented. Outcomes remain uneven, reflecting differences in institutional capacity and the widening asymmetry created by subsidy-driven and security-motivated trade policies.
