Other BriefingsThailand–Cambodia Border Clashes: Causes, Escalation, and ASEAN Impact
In July 2025, fighting along the Thailand–Cambodia border erupted into the most severe confrontation between the two neighbors in more than a decade. Heavy artillery exchanges, rocket fire, and Thai airstrikes have claimed at least 32 lives and displaced over 140,000 civilians.
The violence has revived a long-standing territorial dispute and underscored ASEAN’s limited ability to manage sudden security crises with direct economic consequences.
Historical roots of the dispute
The conflict is rooted in colonial-era demarcations and the contested sovereignty of the Preah Vihear Temple. Although the International Court of Justice ruled in Cambodia’s favor in 1962 and reaffirmed the decision in 2013, ambiguities over adjacent land continue to spark tension.
Past flare-ups between 2008 and 2011 showed how nationalist sentiment and unresolved boundaries can quickly escalate into armed conflict. These historical dynamics set the stage for the 2025 clashes.
The path to July 2025
The crisis followed months of rising tension. A fatal skirmish near Chang Bok in May 2025 and Thailand’s closure of several crossings in June strained relations. On July 23, a landmine explosion seriously injured a Thai soldier, triggering a rapid military escalation.
Cambodia responded with BM‑21 Grad rocket artillery, while Thailand launched F‑16 airstrikes against Cambodian positions. Within hours, border villages were evacuated, and the humanitarian situation deteriorated.
Civilian impact and displacement
The clashes have forced the evacuation of more than 140,000 people and resulted in dozens of civilian casualties. Homes, schools, and hospitals in the border zone have suffered extensive damage, leaving provincial authorities struggling to maintain humanitarian relief.
The scale of displacement highlights the heavy social and economic toll of unresolved territorial disputes.
Political drivers behind the conflict
Domestic politics in both countries have amplified the crisis. In Thailand, Prime Minister Paetongtarn Shinawatra’s suspension over a leaked phone call with former Cambodian leader Hun Sen has fueled a political rift and heightened scrutiny of government actions.
In Cambodia, Hun Manet’s administration has framed the conflict as a defense of national sovereignty, consolidating domestic support while escalating tensions. These internal pressures have shaped military decisions and complicated efforts to de-escalate.
ASEAN and international response
ASEAN has called for restraint, with Malaysia, as chair, urging both sides to return to dialogue. Thailand’s insistence on bilateral talks has limited the bloc’s mediating role. The UN Security Council convened an emergency session, while the United States, China, and the European Union have called for a ceasefire and protection of civilians.
The episode now stands as a test of ASEAN’s ability to move beyond statements and into active conflict management.
Martial Law in the border region
Thailand’s military has declared martial law in eight border districts — seven in Chanthaburi and one in Trat province. The move grants the army sweeping authority to impose curfews, conduct security checkpoints, and restrict movement.
It signals a shift toward full militarization of the frontier and reflects Bangkok’s assessment of the conflict as a national security threat.
For companies operating in the affected provinces, martial law brings immediate compliance obligations and raises the risk of prolonged operational disruption.
Economic and business implications
The clashes have already disrupted a key trade corridor. In 2024, bilateral trade between Thailand and Cambodia reached 174 billion baht (US$3.9 billion), with most of it flowing through land checkpoints that are now closed. In the first five months of 2025, trade exceeded 80 billion baht, but current disruptions are projected to cut export values by up to 60 billion baht (US$1.7 billion) if closures persist. Energy exports, agricultural shipments, and border manufacturing supply chains are the most vulnerable.
Martial law introduces an additional layer of legal and operational complexity. Companies must comply with curfews and new permitting requirements for staff movement and cargo transport in affected areas. Logistics and sourcing strategies will need immediate reassessment, with contingency plans to reroute shipments and shift production outside the security zones.
Outlook and strategic considerations
The next phase depends on whether bilateral negotiations can produce a ceasefire mechanism or whether ASEAN mediation can gain traction despite Thai reluctance. Martial law signals the Thai military’s expectation of a prolonged confrontation, raising the likelihood of sustained disruption to trade and infrastructure development.
For foreign investors, the priority now is scenario planning: weighing the impact of extended militarization, the potential for recurring conflict, and the regulatory shifts that typically accompany heightened security environments.
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