- U.S. signs trade and mineral agreements with four Southeast Asian nations.
- Deals aim to diversify supply chains amid China’s rare earth restrictions.
- Thailand, Malaysia, and Vietnam to lower tariffs and boost U.S. imports.
The United States finalized several agreements on trade and essential minerals with four Southeast Asian partners, aiming to tackle trade imbalances and broaden supply chains in light of stricter export restrictions on rare earths from China.
U.S. President Donald Trump, attending a summit of the Association of Southeast Asian Nations in Kuala Lumpur, signed reciprocal trade agreements with his Malaysian and Cambodian counterparts, along with a framework trade agreement with Thailand aimed at addressing tariff and non-tariff obstacles.
The United States will keep a 19% tariff rate on exports from all three nations under the agreements, with the charge being lowered to zero for certain products, as stated in joint announcements from the White House.
Washington also revealed a comparable framework agreement with Vietnam, which faces a tariff rate of 20% on its exports to the United States. Vietnam, which achieved a trade surplus of $123 billion with the United States last year, has committed to significantly increasing its purchases of American goods to narrow the trade deficit between the nations.
On Sunday, Trump signed two distinct U.S. agreements with Thailand and Malaysia aimed at collaborating to diversify supply chains for critical minerals, in the face of competing initiatives from Beijing in the fast-expanding sector.
China, the leading global miner and processor of rare earths, has tightened export restrictions on its refining technology, forcing manufacturers worldwide to seek alternative sources for essential minerals utilized extensively in semiconductor chips, electric vehicles, and military gear.
Malaysia agreed to not banning or setting quotas on exports of critical minerals or rare earth elements to the U.S., the countries announced in a statement. The statement, however, did not clarify if Malaysia's commitment pertained to raw or processed rare earths. Malaysia, possessing approximately 16.1 million tonnes of rare earth deposits, has prohibited the export of unprocessed rare earths to safeguard its resources while aiming to enhance its downstream industry.
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The agreements were finalized after Trump facilitated the signing of an improved ceasefire pact between Thailand and Cambodia, in the wake of fatal border conflicts between the two nations earlier this year.
Through the agreements, the four Southeast Asian nations committed to eliminating trade obstacles and granting preferential market entry to a range of US products. The agreements also encompass pledges related to digital trade, services, and investments, alongside commitments from Southeast Asian nations to uphold labor rights and enhance environmental safeguards.
According to the statements, Thailand, Malaysia, and Vietnam also consented to accept vehicles manufactured according to U.S. motor vehicle safety and emissions regulations.
Thailand announced it would remove tariff barriers on nearly 99% of products and ease foreign ownership limits for U.S. investments in its telecommunications sector, according to a statement from both nations. According to the statement, Thailand has pledged to buy 80 U.S. aircraft for a total of $18.8 billion and energy goods such as liquefied natural gas and crude oil worth approximately $5.4 billion each year.