Trump Strengthens U.S.–Asian Trade Ties Amid Rare Earth Tensions

The United States finalized a series of trade and critical minerals agreements with four Southeast Asian nations—Malaysia, Cambodia, Thailand, and Vietnam—in an effort to correct trade disparities and expand supply chain resilience amid China’s tightening restrictions on rare earth exports. During his visit to Kuala Lumpur for the Association of Southeast Asian Nations (ASEAN) summit, U.S. President Donald Trump concluded reciprocal trade arrangements with Malaysia and Cambodia, and signed a framework accord with Thailand aimed at resolving tariff and non-tariff trade barriers. Under these arrangements, Washington maintained a 19% tariff on exports from Malaysia, Cambodia, and Thailand, though certain products would benefit from duty-free access. A similar framework agreement with Vietnam, which faces a 20% tariff on exports to the U.S., was also announced. Vietnam, holding a substantial $123 billion trade surplus with the U.S., pledged to increase its imports of American goods to narrow the gap.

Additionally, the United States entered separate accords with Thailand and Malaysia to foster collaboration on diversifying critical mineral supplies, a strategic move to counter China’s dominance in rare earth processing. China’s recent export curbs have intensified global efforts to secure alternative mineral sources essential for semiconductors, electric vehicles, and defense technologies. Malaysia committed not to impose bans or quotas on exports of critical minerals to the U.S., though it remains unclear whether this applies to raw or processed materials. Despite holding 16.1 million tonnes of rare earth reserves, Malaysia continues to restrict raw mineral exports to promote domestic processing.

The new agreements also entail commitments to reduce trade barriers, enhance digital and services trade, safeguard labor rights, and strengthen environmental protection. Thailand, Malaysia, and Vietnam agreed to recognize U.S. vehicle standards, while Malaysia simplified halal certification for American cosmetics and pharmaceuticals. Thailand promised to abolish tariffs on 99% of goods, loosen foreign investment limits in telecommunications, and proceed with large-scale purchases of U.S. agricultural, energy, and aviation products.