President Ursula von der Leyen delivered the EU’s annual “State of the Union” address on 10 September with the message that Europe was “in a fight”. The speech covered topics ranging from energy security, enlargement, climate ambition, technological sovereignty, migration, and responses to conflicts such as Ukraine and Gaza. Common to these themes was a call for Europe to reduce dependencies, strengthen its internal base, and assert itself more firmly in a shifting global order. 

Within this broad agenda, the areas of interest for ASEAN stakeholders are the economic aspects. With greater emphasis on reinforcing Europe’s industrial base, diversifying trade partnerships, and defending the rules-based order as the foundation of global commerce, changes to Europe’s economic landscape are occurring on multiple fronts, and with it, new opportunities and fresh challenges for ASEAN businesses and policymakers.

Partnerships, Diversification & the Rules-Based Order 

One of the strongest themes in President von der Leyen’s address was Europe’s determination to reinforce the rules-based global trading order while reducing its dependence on unreliable partners. She framed diversification as both an economic and strategic priority, pointing to ongoing negotiations with India, Mexico, and Mercosur as examples of how Brussels is seeking to widen its circle of “like-minded” partners. Alongside this push, she underlined the EU’s role as a standard-setter, insisting that Europe must “set its own standards and regulations” to remain competitive and credible in a turbulent world.

For ASEAN, these signals potential challenges and opportunities. While not explicitly mentioned in her speech (her speechwriter has a tendency to leave out Southeast Asia and ASEAN), the EU’s FTA agenda leans heavily on ASEAN. The bloc is aiming to conclude FTAs with Indonesia, Thailand, Philippines and Malaysia in the next two years. The FTA with Indonesia has already completed negotiations, while the other three are picking up pace.  

Alongside the objectives of the FTAs, the EU’s diversification agenda also presents real opportunities as a developed market for the region’s exporters, while putting the EU in a better position to gain access to ASEAN’s primary resources. Indonesia’s nickel and copper, Malaysia’s biofuels and downstream green products, and Thailand’s automotive and pharmaceutical sectors all align with Europe’s search for secure and sustainable supply chains. 

The EU’s reaffirmed support for WTO reform is also welcome for ASEAN economies that rely heavily on predictable, rules-based trade to safeguard their competitiveness. ASEAN is united in its support for the multilateral trading system. At the recent ASEAN+ Economic Ministers’ Meeting in May 2025, economic ministers from ASEAN and their four key dialogue partners (China, Japan, Australia, and New Zealand)  strongly reaffirmed their support for using the WTO as the primary mechanism to resolve trade disputes, avoid retaliatory trade measures, and prevent trade wars.

Yet opportunities are often not without challenges. Europe’s vision of “like-minded partners” is closely tied to its demand for regulatory alignment. ASEAN exporters will increasingly need to comply with EU standards on sustainability such as labour standards, ESG disclosure, and digital governance such as data privacy, to qualify as trusted suppliers. While this raises compliance costs, it also creates an opening: those ASEAN firms that adapt early stand to benefit from greater access to the EU market. 

Competitiveness, Industrial Policy & Single Market Reform 

Beyond global partnerships, President von der Leyen’s address placed competitiveness firmly at the heart of Europe’s agenda. She introduced the proposal for an Industrial Accelerator Act to help scale advanced sectors such as clean tech, semiconductors, and AI, alongside the Single Market Roadmap 2028, which seeks to reduce fragmentation in areas like capital markets, services, and energy. New infrastructure measures such as the European Grids Package also signal Brussels’ intent to build a “faster, simpler, stronger” internal market. At the same time, the Global Gateway was hardly mentioned in her speech, signalling a possible slow down in EU’s investment in infrastructure deals outside of Europe and expected budgetary constraints.  

For ASEAN businesses, this agenda carries both promise and challenge. A more competitive and unified Europe could translate into more stable and predictable demand for ASEAN’s intermediate goods and inputs. ASEAN businesses with EU subsidiaries should prepare for regulatory shifts that could improve cross-border operations. Many of Europe’s advanced manufacturing companies still rely on supply chains outside of the EU, including from ASEAN, and the Industrial Accelerator Act will serve to increase demand from ASEAN sectors already linked to European value chains, such as Vietnamese electronics, Malaysian bio-components, or Indonesian raw materials for EV batteries, especially given the launching of a €1.8 billion EU Battery Booster package.  

At the same time, the tilt toward “Made in Europe” may result in more subsidies and industrial incentives designed to give European firms an edge in strategic sectors. Public procurement will prioritise European-made products. ASEAN exporters, particularly at the higher end of the value chain, may find themselves competing against well-supported local producers. Conversely, ASEAN firms with EU-based operations or partnerships may gain a competitive edge. 

Trade Deals, Stability & Political Realities 

Trade policy also featured prominently in von der Leyen’s address, framed as part of Europe’s wider resilience agenda. She defended the EU-US agreement as providing “crucial stability…at a time of grave global insecurity.” While the deal has its controversies over the extent of concessions given to the US, it still provided a semblance that the deteriorating transatlantic trade relationship was being repaired. 

This logic extends beyond the Atlantic. Von der Leyen referred to India, Mexico and Mercosur, but also referenced CPTPP as an example of a coalition of like-minded countries that the EU could take reference from in reforming the global trading system (she had previously mentioned the possibility of working with CPTPP on previous occasions, without spelling out how concretely). In keeping with the EU’s fair-trade narrative, she emphasised trade agreements are “not just about tariffs” but about embedding sustainability, fair competition, and predictability. 

For ASEAN, the implications are multidimensional. Von der Leyen did not mention ASEAN explicitly in her speech, but the EU’s desire to close trade deals quickly was made apparent and will work to the benefit of the existing FTA negotiations with the four ASEAN Member States. 

Conclusion

Taken together, the 2025 State of the Union address reinforced the EU’s desire to reinforce its economic base, diversify its partnerships, and navigate global uncertainty with binding frameworks and higher standards. For ASEAN stakeholders, the key takeaways from the address is to find opportunities in the EU’s search for economic growth but also to prepare for more challenges on state aid and protectionism.