A new UNDP report titled “Disruption, Diversification, and Divergence: Adapting Development Strategy to a Shifting Trade Landscape in Asia and the Pacific” warns that Asia-Pacific countries are navigating a rapidly shifting trade landscape marked by rising tariffs, fragmented global value chains, and mounting uncertainty. The report identifies three defining forces—disruption (from tariff shocks), diversification (of trade and production), and divergence (in countries’ ability to adapt)—as reshaping the region’s trade and development trajectory.

To address these challenges, the report outlines a dual-track strategy for development:

Outward adaptation and external competitiveness. It calls for diversifying trade relationships, deepening regional integration, upgrading domestic value chains, and investing in digital trade and innovation. 

Inward strength and social resilience. It emphasizes the need to strengthen domestic engines of growth, expand inclusive social protection, and build a future-ready workforce.