Asean

Economic and Geopolitical Realignment at the core of the meeting that took place in Malaysia, at the side of the ASEAN summit

By Luca Menghini

The ASEAN–GCC Summit held in Kuala Lumpur on May 27–28, 2025, marked a turning point in interregional diplomacy between two of the world’s most dynamic and strategically important regions: the Association of Southeast Asian Nations (ASEAN) and the Gulf Cooperation Council (GCC). Taking place alongside the first-ever ASEAN–GCC–China Summit and the 46th ASEAN Summit, this event underscored the growing importance of cross-regional cooperation in a world defined by economic uncertainty, strategic fragmentation, and the accelerating erosion of long-established global alliances. The summit offered a comprehensive vision for deepening political, economic, and strategic ties between the Gulf and Southeast Asia while also highlighting the increasing assertiveness of regional actors in shaping global affairs.

The summit built on the momentum established during the inaugural ASEAN–GCC Summit in Riyadh in October 2023, where leaders laid the groundwork for a structured partnership through the endorsement of the ASEAN–GCC Framework of Cooperation 2024–2028. That framework had already identified a wide array of priority areas for cooperation, ranging from energy and digital transformation to Islamic finance, education, and people-to-people exchanges. The Kuala Lumpur meeting elevated these ambitions by providing new political direction, stronger institutional mechanisms, and a clearer alignment of strategic interests between the two regions.

At the heart of the summit was a shared recognition that ASEAN and the GCC are at a critical juncture. For ASEAN, recent global trade tensions including a dramatic escalation in tariffs imposed by the United States under its reactivated protectionist agenda have amplified the need to diversify economic partnerships. The new U.S. tariffs, introduced in April 2025 and affecting a wide range of ASEAN exports, have placed particular pressure on regional manufacturing hubs such as Vietnam, Thailand, and Malaysia. These developments have accelerated ASEAN’s pivot toward emerging markets and partners that offer more predictable and mutually beneficial trade relationships.

Meanwhile, the GCC states are undergoing their own transformation. Long reliant on hydrocarbons, Gulf countries are pursuing aggressive economic diversification strategies under national development plans such as Saudi Arabia’s Vision 2030, the UAE’s Centennial 2071, and similar initiatives in Bahrain, Oman, and Qatar. These plans emphasize the growth of non-oil sectors such as technology, finance, logistics, tourism, and clean energy. ASEAN, with its young population, fast-growing consumer markets, digital innovation ecosystems, and increasing demand for investment, presents itself as an ideal partner in this transformation.

Against this backdrop, the summit’s discussions were wide-ranging and forward-looking. One of the key announcements was the intent to explore a formal ASEAN–GCC Free Trade Agreement. While trade between the two blocs already surpassed $130 billion in 2024, leaders expressed the ambition to grow this figure to $180 billion by 2032. The proposed FTA would not only aim to reduce tariffs and non-tariff barriers, but also address regulatory alignment, logistics facilitation, and investment protection, which are crucial elements for promoting long-term private sector engagement and regional value chain integration.

Beyond trade, energy cooperation emerged as a central theme. The two regions discussed scaling up collaboration on energy security and energy transition, including the joint development of clean hydrogen, the establishment of long-term LNG supply agreements, and potential investment in electricity interconnection projects. The Gulf countries, rich in capital and increasingly committed to carbon neutrality, are keen to partner with ASEAN countries pursuing ambitious decarbonization targets and renewable energy goals. Such cooperation could include financing solar and wind power projects, exchanging best practices on energy regulation, and co-investing in regional energy infrastructure.

Digital transformation was another strategic pillar of the summit. Leaders emphasized the potential of a joint digital economy agenda, covering areas such as smart cities, e-commerce regulation, data governance, cybersecurity, and artificial intelligence. The prospect of jointly developing digital infrastructure such as undersea fiber-optic cables, cloud computing facilities, and cross-border digital payment systems was identified as an area with vast untapped potential. This digital cooperation could support both regions’ efforts to strengthen economic resilience, improve productivity, and expand access to technology across urban and rural communities.

Food security and agricultural trade also figured prominently in the discussions. GCC countries, many of which face limited agricultural capacity due to arid climates, are increasingly investing in food imports and agri-tech innovation. ASEAN, as a major food-producing region, offers supply stability and opportunities for investment in value-added production. Plans for joint research initiatives, supply chain modernization, and the promotion of Halal-certified food exports were discussed as part of broader food system resilience strategies.

Connectivity, both physical and institutional, was another key focus. The summit emphasized the need to enhance air, sea, and land linkages between ASEAN and GCC ports and cities. Leaders endorsed efforts to harmonize customs procedures, promote maritime cooperation, and explore joint investments in port infrastructure and transport corridors. Such initiatives would help reduce trade frictions, facilitate tourism, and improve regional integration. On the institutional front, the summit committed to strengthening ASEAN–GCC coordination mechanisms, including through more frequent diplomatic consultations, annual policy dialogues, and high-level exchanges between secretariats, ministries, and think tanks.

Cultural cooperation and people-to-people exchanges were also highlighted as vital components of the growing partnership. Both regions pledged to expand academic mobility programs, university partnerships, tourism promotion campaigns, and platforms for interfaith and intercultural dialogue. The development of ASEAN–GCC scholarship initiatives, cultural festivals, and youth exchanges was presented as a way to strengthen mutual understanding and long-term ties between societies.

Notably, the summit was also shaped by the presence of China during the trilateral ASEAN–GCC–China discussions. While ASEAN and the GCC maintained a strong emphasis on bilateral cooperation, China’s participation added a layer of geopolitical complexity and opportunity. China remains ASEAN’s largest trading partner and a major energy partner for the GCC. Leaders welcomed deeper trilateral dialogue and emphasized the importance of multipolar cooperation that does not exclude traditional partners but seeks to create new, complementary alliances.

The broader message emerging from the Kuala Lumpur summit is clear: ASEAN and the GCC are determined to take greater control of their own economic destinies. Faced with global instability, unpredictable U.S. trade policy, and rising geopolitical tensions in Europe and the Indo-Pacific, both regions are moving toward a more strategic form of regionalism. Rather than relying on traditional institutions or alliances, they are seeking pragmatic, sector-specific partnerships that deliver tangible benefits for their populations and reduce strategic dependencies.

The summit also reflected the growing confidence and capability of regional organizations like ASEAN and the GCC to serve as platforms for diplomatic innovation and economic coordination. Their ability to convene not only their member states but also major powers such as China speaks to a new reality in global affairs: the center of gravity in trade, finance, and strategic engagement is shifting steadily toward Asia and its surrounding regions.

In sum, the 2025 ASEAN–GCC Summit in Kuala Lumpur was more than a ceremonial gathering. It was a strategic convergence rooted in shared interests and shaped by a changing global environment. As the two regions implement the joint decisions and frameworks laid out at the summit, their cooperation could become a model for how middle powers and regional blocs can shape a more stable, prosperous, and multipolar global order on their own terms and in pursuit of shared futures.

The French president in Vietnam, Indonesia and Singapore to strengthen trade and diplomatic ties with the ASEAN region

By Emanuele Ballestracci

For several years now, there has been a gradual increase in awareness of the strategic importance of the Indo-Pacific in the European Union and among its member states. This growing interest has partly followed the example of the United States, particularly since the “pivot to Asia” promoted by the Obama administration. In Europe, debates on the Indo-Pacific region have begun to translate into more concrete strategy documents, culminating in the adoption of national strategies by some member countries. The most prominent is certainly that of the European Union, which is joined by those of individual member states, including France, the Netherlands, Germany, the Czech Republic and even Lithuania. In Italy, too, a national strategy for the Indo-Pacific is currently being discussed in Parliament, despite the fact that the country's interest and projection capacity in the region is significantly lower than in other European counterparts. Prominent among them is France, as evidenced by President Emmanuel Macron's tour of Southeast Asia this week.

The tenant of the Elysee Palace himself was among the main promoters of the French Indo-Pacific Strategy, later formalized in 2018, aimed at identifying Paris' core interests in the region and equipping itself with concrete tools, both in the short and long term, to pursue them. This testifies to the growing Western awareness of the progressive shift of the global economic and geopolitical center of gravity toward Asia. France, by the way, is the only European country that still holds territories in the Indo-Pacific region, including New Caledonia, French Polynesia, La Réunion and Mayotte, which together are home to about 1.6 million French citizens. The French president's trip to Vietnam, Indonesia and Singapore thus aims to reaffirm the centrality assigned to the region, strengthen diplomatic ties and promote France's strategic presence, while contributing to the implementation of the French Strategy. This is not an isolated initiative: the Macron presidency has been punctuated by similar trips, including those to Australia, India and La Réunion in 2018, Japan in 2019, as well as participation in the APEC summit in 2022.

The French Indo-Pacific Strategy, adopted in 2018, aims to protect French territories and sovereign interests in the region by promoting an international order based on law and multilateralism. It is based on pillars such as security, freedom of navigation, economic and environmental cooperation, and strengthening regional partnerships. Within this framework, France aspires to position itself as a balancing power, active in preventing crises and promoting regional stability. These are the concepts that Macron clearly expressed during his stop in Vietnam. France's willingness to present itself, together with the European Union, as a reliable partner is particularly relevant in the current context marked by growing international instability, trade uncertainty dictated by U.S. tariffs and strategic competition between the United States and China. Participation in the Shangri-La Dialogue in Singapore, Asia's premier security and defense summit, gives Macron an additional opportunity to present Paris and Brussels as credible and stable players in an increasingly uncertain global order.

In addition, the presidential visits present an opportunity to accelerate the process of diversifying global value chains, particularly through collaborations in key sectors such as energy, transportation, defense, and space. Above all, the environment is a central theme, with France hosting the UNOC conference on oceans in Nice in a few weeks. In addition, President Macron has promoted the Just Energy Transition Partnerships (JETP), under which countries such as Indonesia and Vietnam have committed to decarbonization in exchange for investment and financial support, including from France.

The Macronian tour is thus part of a broader and now decade-long process of growing French engagement in the Indo-Pacific region, in which Paris has distinguished itself as the most determined European player in defending and promoting its strategic interests, while also serving as a spokesperson for the European Union.

Remarks by the President of the Italy-ASEAN Association during the events organized by Confindustria and SACE, held as part of the Asian Development Bank’s Annual Meeting in Milan

“Italy and Italian companies can expect to play a very important role in ASEAN,” declared Ambassador Michelangelo Pipan, President of the Italy-ASEAN Association, during the event “The Potential of the Italian Industry for Development Projects in the ASEAN Countries,” organized on Tuesday, May 6 by Confindustria as part of the Asian Development Bank’s (ADB) Annual Meeting held in Milan. “The opportunity is real and ready to be seized, especially today, at a time when the world is facing an unprecedented situation. The foundations of the international economic order have been shaken, if not outright overturned; global trade is threatened by serious geo-economic fragmentation; supply chains must be reorganized, while climate change remains a challenge that can only be addressed through joint efforts – now harder than ever to achieve,” Pipan explained during the panel titled “Development Cooperation in ASEAN Countries: Projects and Instruments.” According to the President of the Italy-ASEAN Association, “States will need to reshape their policies, seeking new partners, diversifying sources of raw materials and investment goods, and identifying new markets for their exports. In this process, they will look for like-minded partners. They will want to avoid excessive dependence on single partners. ASEAN, in particular, is a staunch supporter of multilateralism and free trade; it has a long tradition of refusing to take sides between the two superpowers – China and the United States – which are also its main economic partners. So far, ASEAN has performed a remarkable and efficient balancing act.” As Ambassador Pipan explained, “Following the recent tariff chaos, it is very likely that new ‘constellations’ of economic partnership will emerge: ASEAN has traditionally been very active in this direction, seeking broader trade perspectives, the most emblematic example being the central role it played in supporting the RCEP treaty, which came into force in 2022 and eliminated 90% of tariffs among 15 countries representing 30% of global GDP.”

In the context of a likely and significant increase in economic relations between the EU and ASEAN, Pipan emphasized that “Italy and its companies are well positioned: our skills are well known, highly appreciated, and align well with ASEAN’s development priorities. To name a few areas in line with ASEAN’s Post-2025 planning: renewable energy, industrial automation, infrastructure, development of the health sector – including medical equipment – space and high technology.”

On the same day, Tuesday, May 6, the President of the Italy-ASEAN Association also delivered a keynote address at the event “SACE’s Growth Effect: Expanding Borders, Building the Future,” organized by the Italian financial and insurance group. Speaking immediately after Riccardo Barbieri, Director General of the Ministry of Economy and Finance, he highlighted the role of the HIGH LEVEL DIALOGUE on ASEAN-ITALY ECONOMIC RELATIONS, the annual event organized by the Italy-ASEAN Association together with The European House – Ambrosetti in a capital of an ASEAN country, which this year will be held in Vietnam. Ambassador Pipan noted that “it is the Government that must lead, and we were very pleased to see that in the recent Export Action Plan published by MAECI, ASEAN has been included among the priorities (with particular focus on Vietnam, Thailand, and Indonesia), and will benefit from new and more powerful tools – including those from SACE – for export promotion.” According to the President of the Association, “ASEAN countries have every reason to seek partnerships with Italian companies. Ultimately, however, it is the interest of the business community that really matters in making all the ingredients blend into success! And it is precisely on this last point that greater efforts are needed: to help raise awareness of ASEAN in Italy. In this context, we have recently proposed to MAECI to co-organize an international conference titled ASEAN AWARENESS, following the model of two similar initiatives held in the 2010s,” Pipan concluded.

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ASEAN countries have been hit hard by US tariffs. Donald Trump’s unconventional trade policy calls for equally unprecedented responses. For now, caution and a willingness to negotiate prevail — but the role of Washington (and Beijing) in the region is set to change

Article by Pierfrancesco Mattiolo

In the end, the tariffs promised by Donald Trump have come into effect. Not the ones announced during the notorious Liberation Day on 2 April—which were suspended a few days later for a period of three months, likely in reaction to the negative answer from Wall Street. For now, only a general tariff of 10% will apply, with some exceptions: tariffs exceeding 100% on Chinese imports; 25% duties on steel and aluminium; and certain products, such as semiconductors, exempted. During the election campaign, Trump floated the idea of raising tariffs by between 10% and 20%, so the current structure can be viewed as a fulfilled promise—although the unpredictable nature of the current US Administration makes it difficult to foresee what tariffs will be in place in a year, a month, or even a week. The 10% tariffs remain substantial and may mark the beginning of a period of deep uncertainty for the global economy.

Should the tariff plan presented by Trump during Liberation Day eventually be implemented, tariffs on nearly all ASEAN countries would rise above the 10% baseline. In descending order, Cambodia would face a 49% tariff; Laos, 47%; Vietnam, 46%; Thailand, 36%; Indonesia, 32%; Malaysia and Brunei, 24%; the Philippines, 17%. Only Singapore would remain at 10%, as it is the only country that imports more from the US than it exports. As many analysts and international media outlets have pointed out, these so-called “reciprocal tariffs” are not, as claimed by the White House, based on the tariffs these countries impose on American goods, but rather on their trade deficits with the United States. This approach has drawn criticism, and it places these countries in a difficult position: even if they lower tariffs on US products, the trade deficit might be reduced—but not reversed entirely, and certainly not through government initiative alone. Furthermore, the mercantilist outlook of the current US Administration does not consider the fact that American companies import many low-cost goods from abroad, then benefit from high margins when selling the final product to consumers, whether domestically or internationally. The US economy, being the most advanced in the world, is also in a position to focus on exporting services and attracting investment and savings, in accordance with the principle of specialisation. Trump’s stance disrupts the vision of international trade that has shaped the agenda of most governments around the world for decades.

Another unorthodox element of Trump’s trade policy is the imposition of a general tariff on all goods, from all countries. Typically, trade policy avoids “one-size-fits-all” measures. Goods not produced domestically tend to face low tariffs; those that a country wishes to continue producing—perhaps for political or strategic reasons—are subject to higher duties. To gain greater access to another country’s market (i.e., to have tariffs on one’s goods reduced), it is customary to offer reciprocal access, selecting which goods make the most sense to include in a bilateral tariff reduction. The EU’s trade policy in the region, as demonstrated by free trade agreements with Vietnam and Singapore, follows this approach. Trump, by contrast, appears to prioritise these considerations only at a later stage, for instance, by exempting essential or foreign-manufactured products like semiconductors from tariffs.

Finally, a key divergence between Trump’s trade policy and more “conventional” approaches concerns his stated objectives—or rather, the absence of a single, clearly defined goal. Listening to the President and his advisers, the Administration appears to be pursuing multiple objectives, some of which are even contradictory. Is the aim to increase federal revenue to offset other tax cuts? To bring certain industries back to the US? To reduce or eliminate trade deficits? To secure concessions on other political or economic matters? Or to pressure third countries not to cooperate with America’s geopolitical rivals, China chief among them? As The Diplomat has noted, this ambiguity makes it difficult for ASEAN nations (and others) to understand Trump’s intentions and how to meet them—leading to the conclusion that perhaps Washington has no intention of removing the tariffs altogether. This worst-case scenario appears to be supported by Trump trade adviser Peter Navarro’s response to Vietnam’s initial conciliatory offers to reduce its tariffs: “(it) means nothing to us”, as Vietnam acts as a “transshipment” point for Chinese goods and is “essentially a colony of communist China.”

How, then, might the governments of the region respond? For now, caution and a willingness to engage with Trump seem to prevail. As Mexico has demonstrated, this approach appears the most effective for delaying the implementation of tariffs. No ASEAN country has imposed retaliatory tariffs; if Trump’s trade policy breaks with long-established norms, so too does the response of trade partners. By choosing this path, ASEAN governments are in part validating Trump’s narrative—namely, that American firms would not face retaliation, as trade partners would instead rush to make concessions. Trump himself used a particularly vivid phrase (to put it mildly) to reinforce this message following Liberation Day. Several ASEAN nations have already offered to reduce their own tariffs and trade deficits by increasing imports of US goods and diversifying their export markets. In the case of Vietnam, while Navarro’s comments offer little encouragement, Trump himself struck a more positive tone—calling a conversation with General Secretary To Lam “very productive.” Hanoi has also started cooperating with Starlink, Elon Musk’s space venture, likely in hopes of gaining an ally close to Trump. Given that the position of the Trump Administration is President Trump’s position, more than the ones of his advisers, having Navarro against and Musk in favour may make little difference—especially as Musk appears increasingly disengaged from Oval Office decision-making.

What will prove more difficult, however, is enforcing a commercial and political break with China. For instance, journalist David Hutt, an expert on Cambodia, has noted that the US might request that Phnom Penh scale back its cooperation with China at the Ream naval base in exchange for reduced tariffs. Yet countries hit by tariffs may choose a different path: if exporting to the US becomes more difficult, they can still trade with one another—including with China. Beijing has seized the opportunity to position itself as a reliable defender of free trade and an alternative to the increasingly unpredictable Washington. As a result, international attention has partly shifted from China’s aggressive trade practices to the US tariffs. Chinese President Xi Jinping has already begun a series of official visits across the region and achieved a symbolic success with the resumption of economic cooperation with Japan and South Korea—something that had not occurred during the Biden years, when the three countries had drifted apart. ASEAN governments, accustomed to hedging relations between the two Pacific powers, will continue to do so—but now with the perception that the United States may have become a less reliable and predictable partner. Nevertheless, America’s “strategic retreat” from the region opens the door not only to China, but also to a stronger role for the European Union as a commercial and strategic partner.

For Southeast Asia, closer ASEAN cooperation may offer a way to resist Trump’s divide et impera approach. The current chair of the Association, Malaysia, has pledged to coordinate a collective response to this challenge to its export-driven economic model. While member states have been affected to varying degrees, compared to the tariff measures during Trump’s first term, the risks now appear far greater than the opportunities. In recent years, some economies—Vietnam’s, in particular—had benefited from the US-China decoupling, attracting a significant share of the production destined for the American market. But this very success increased their trade deficit, leading to the higher tariffs imposed by Trump. The message of Liberation Day is clear: winning a greater share of the US market and becoming increasingly reliant on exports for growth could ultimately put a country at risk in the long run. While the trade tensions of Trump’s first term resembled a zero-sum game with winners and losers—consistent with what seems to be Trump’s worldview—this time, it appears that everyone may stand to lose. The uncertainty caused by Trump’s mercurial policies, which do not align with established economic thinking, risks having a negative impact on investment and the global economy as a whole.

Southeast Asian countries are among those most affected by the duties imposed by the United States on what Donald Trump has dubbed ’Liberation Day.” All 10 member states of the Association of Southeast Asian Nations (ASEAN) have been affected. To be precise, as of April 9, additional import taxes will be imposed with the following percentages: 49 percent for Cambodia, 48 percent for Laos, 46 percent for Vietnam, 44 percent for Myanmar, 36 percent for Thailand, 32 percent for Indonesia, 24 percent for Malaysia and Brunei, 17 percent for the Philippines, and 10 percent for Singapore. Many of these countries are strong exporters to the United States, while the region has long been among the leading factors of global trade, having signed a number of bilateral and multilateral free trade agreements. “Now these countries in Southeast Asia will have to look more carefully at other markets than the U.S., the same need that many other countries including European ones will have,” stresses Ambassador Michelangelo Pipan, President of the Italy-ASEAN Association. “Consequently, the European Union and Italy itself, which enjoy several free trade agreements with some of these countries, can and must equip themselves to strengthen trade relations with Southeast Asia,” Pipan continues,stressing that ”our interests and those of ASEAN atguarding free trade and against protectionism coincide. Even more so after the new White House tariffs.

“Washington has decided to hit Southeast Asian countries despite the concessions already made in recent days by some of them. This is the case of Vietnam, which in recent years has risen to a critically important global trade and technology hub, which has announced duty reductions and a commitment to import more U.S. goods. “It is still early to make predictions, but this disruption caused by Trump seems destined to foster the creation of different constellations that by increasing cooperation with each other will try to make up for this closure of the U.S. market,” Ambassador Pipan explains. Dataon trade between Italy and ASEAN have increased enormously over the past year, thanks in part to the work done by the Italy-ASEAN Association.

Some Asian economies such as Malaysia, Singapore, and Vietnam are positioning themselves to be winners in a possible new trade war

Several problems, but also some opportunities. As threatened on the campaign trail, U.S. President Donald Trump began his second term by introducing tariffs to address a wide range of issues, from immigration to national security to over-reliance on imports for manufacturing. But Trump's trade barriers are much more targeted than feared on the campaign trail, points out Trinh Nguyen, economist at Natixis Corporate & Investment Banking, in an editorial in the Financial Times. Instead of worrying about tariffs, investors should look for opportunities in countries that can benefit from the likely changes, Nguyen argues. Asian emerging market economies outside of China should be on the list, because as during Trump's first term they could benefit. Vietnam is the big example, the Financial Times reports. From 2017 to 2023, the country increased its share of exports to the United States in all product categories, making it a winner among Asia's emerging economies. This growth is not simply the result of China redirecting exports under the guise of Vietnamese products, but is the result of Vietnam's greatly expanded international trade relations. According to Nguyen, Malaysia and Singapore have also benefited from a push for investment diversification. Kuala Lumpur has focused on high-tech sectors such as semiconductors and data centers, while Singapore has expanded into financial services and attracted corporate headquarters. This year, the two countries also collaborated to establish the Johor-Singapore Special Economic Zone to boost investment and jobs in strategic sectors. ASEAN has now become the largest recipient of foreign direct investment in Asia. For some economies, the new shock to global trade represents “an opportunity to strengthen resilience, liberalize trade access and improve competitiveness,” according to the economist. Some Asian economies, such as Malaysia, Singapore, Vietnam, and increasingly India, are positioning themselves to be winners in the trade war.”