Resilience in a conditional trade order: ASEAN’s 2026 challenge

For ASEAN, policy volatility is now an input into industrial planning.

Apoorba Banerjee

28 January 20264 min read

In Southeast Asia, “supply chain resilience” used to mean incremental diversification and a little extra inventory. In January 2026, that framing seems too small. Resilience is increasingly a question of economic statecraft and systems engineering: whether ASEAN can keep production and trade functioning when policy shocks arrive faster than shipping schedules.

The opening signal this year has been Washington’s explicit re-linking of technology trade to national security. On 14 January, the Trump administration imposed a 25% Section 232 tariff on a narrow set of advanced computing chips, the White House framing it as a first phase while flagging the possibility of broader measures after negotiations. For ASEAN, the point is not the initial product list. It is that policy volatility is now an input into industrial planning.

ASEAN’s “China+1” rise has turned the region into a preferred manufacturing area for firms trying to reduce the risk of concentrating their interests in China only. But in a more conditional trade order, being a beneficiary is not the same as being trusted. Singapore’s Ministry of Trade and Industry has sought to reassure stakeholders that the immediate impact of the US chip tariff should be limited.

That reassurance underlines a new test: ASEAN governments will increasingly be judged on their ability to prevent transshipment disputes, enforce rules-of-origin credibly, and demonstrate that special economic zones and logistics hubs are not compliance blind spots.

The second constraint is energy. Policy shocks become economically painful when grids and fuels cannot absorb disruption. Malaysia is illustrative. Reuters analysis of Grid System Operator data shows Peninsular Malaysia ramped gas-fired generation sharply in December while coal output fell, yet coal still dominated annual generation as demand rose, including from data centres. This is a regional warning: industrial scaling is colliding with transmission limits, reserve margins, and fuel-security trade-offs that sit squarely inside the domestic political economy. In 2026, “competitiveness” arguments that ignore grid capability will increasingly read as unserious. The state’s ability to deliver reliable power at scale is now part of its investment credibility and its strategic autonomy.

Energy security also sits close to contested geography. On 19 January, President Ferdinand Marcos Jr announced the Philippines’ first natural gas discovery in more than a decade near the Malampaya field off Palawan, potentially easing a looming supply gap. The next day, China announced that it had mobilised naval and air forces to warn off a Philippine government aircraft over Scarborough Shoal. The point is that grid resilience, offshore resources, and maritime competition are converging into one policy problem. When domestic power plans rely on offshore developments, maritime risk becomes an energy risk, which becomes an industrial risk.

Maritime security is therefore supply chain policy. The ReCAAP Information Sharing Centre’s weekly report for 13 to 19 January recorded four armed robbery incidents against ships in Asian waters, including incidents in the Singapore Strait area and Indonesian anchorages, with theft of engine spares and scrap metal. This kind of friction rarely makes headlines, but it reliably raises costs and reduces schedule certainty in chokepoints that underpin ASEAN trade. The strategic significance is not only the incidents themselves but the cumulative effect on insurance pricing, routing choices, and the viability of just-in-time models for high-throughput industrial corridors.

2026 will reward regions that treat policy, electrons, oceans, and minerals as one system.

Critical minerals complete the triangle. In mid-January, US lawmakers introduced a bill to create a $2.5 billion Strategic Resilience Reserve for critical minerals, explicitly framed as a response to Chinese market power. Days later, it was reported that China’s exports of rare earth magnets to Japan fell in December. Minerals are no longer governed purely by geology and capacity. They are governed by stockpiles, export scrutiny, and diplomacy. For ASEAN, the risk is strategic whiplash: investment decisions made on commercial assumptions colliding with sudden policy-induced scarcity, price shocks, or compliance tightening in export markets.

Three policy priorities follow from this January 2026 landscape.

First, treat electricity as strategic infrastructure. Prioritise transmission upgrades, reserve adequacy, and system operations, and scale cross-border interconnection pragmatically where it improves reliability.

Second, build an ASEAN “trusted node” posture. Harden customs and traceability capacity, align minimum standards for transshipment enforcement, and invest in export-control literacy across ports, free zones, and industrial parks.

Third, elevate maritime resilience to the economic cabinet. Expand coordinated patrols and incident response mechanisms in and around the Strait of Malacca and Singapore, and strengthen port and anchorage security where low-level thefts create outsized disruption.

2026 will reward regions that treat policy, electrons, oceans, and minerals as one system. ASEAN’s opportunity remains real, but capturing it now requires policy competence that is as operational as it is diplomatic.

About the author

Apoorba Banerjee

Apoorba Banerjee is a Malaysia-based country operations strategist leading industrial bearings initiatives across ASEAN, with a focus on supply chain resilience and energy infrastructure.

Topics

ASEAN Energy & resources Cyber & technology Trade & investment