US and Southeast Asia Reach a Flexible Tariff Deal
On October 26 , during the 47th ASEAN Summit in Malaysia , US President Donald Trump signed a series of trade and cooperation agreements with Malaysia, Thailand, Cambodia, and Vietnam . The pacts cover a broad range of areas — from tariff arrangements and supply chain coordination to critical mineral exports — highlighting Washington's intent to deepen its economic presence in Southeast Asia while navigating a web of regional interests.
Tariff Terms: Unchanged Baseline, Targeted Exemptions
According to a joint White House statement, the US will maintain a 19% tariff rate on exports from Malaysia, Thailand, and Cambodia, and 20% on Vietnamese goods , consistent with its previous “reciprocal tariff” structure.
However, the US granted selective exemptions :
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Malaysia received tariff exemptions on 1,711 product categories , worth USD 5.2 billion , or roughly 12% of its total exports to the US
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The exemptions span key commodities — palm oil, cocoa, and rubber — as well as high-value sectors like aerospace components and pharmaceuticals .
Mutual Commitments and Market Access
The agreement also established a “benefit exchange” mechanism :
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Malaysia and Cambodia agreed to reduce tariffs and regulatory barriers for US automobiles and agricultural products, while increasing imports of Boeing aircraft and other US goods. Malaysia also announced a USD 70 billion investment plan in the US over the next decade.
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Vietnam and Thailand committed to lower import tariffs on nearly all US products and implement large-scale purchases of aircraft, energy, and agricultural goods .
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Thailand alone will buy 80 US aircraft worth USD 18.8 billion , and import USD 5.4 billion in energy products and USD 2.6 billion in feed corn and soymeal annually .
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Additionally, Thailand will ease foreign ownership limits in its telecom sector, while Malaysia will simplify market access for US cosmetics and pharmaceuticals .
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Critical Minerals and Supply Chain Security
The US signed separate critical mineral cooperation agreements with Malaysia and Thailand.
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Malaysia pledged not to ban or restrict exports of key minerals to the US, though it left ambiguity on whether this applies to raw materials or processed products.
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Thailand agreed to enhance supply of critical minerals to US industries.
The deals also include labor protection, environmental standards , and digital trade provisions — aligning regional partners more closely with US regulatory frameworks in industrial and automotive sectors.
Divergent Reactions and Uncertain Implementation
While Southeast Asian media outlets welcomed the deal's relative stability, analysts highlighted its non-binding nature.
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Malaysia's Trade Minister Tengku Zafrul Aziz praised the US for offering "better access conditions" than before, while reaffirming national sovereignty.
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Experts, however, note that the agreements are “flexible frameworks” rather than legally binding treaties, meaning implementation remains uncertain .
Geopolitical and Strategic Implications
From a strategic standpoint, the agreements carry clear competitive undertones . Analysts argue that many provisions — particularly those concerning export controls and critical minerals — are part of Washington's broader effort to counter China's influence in the Indo-Pacific.
Yet, reality suggests a more complex picture.
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China remains ASEAN's largest trading partner , with 2024 bilateral trade reaching USD 982.3 billion , far exceeding US-ASEAN trade volumes.
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As Prof. Ge Hongliang from Guangxi Minzu University notes, Southeast Asian nations are deeply integrated with China's industrial chains and are reluctant to “pick sides” between the two powers.
Conclusion: A Flexible Compromise with Strategic Depth
Ultimately, the new US-ASEAN tariff framework represents a non-rigid compromise — the US trades targeted tariff relief for market access and resource security , while Southeast Asian countries gain short-term economic benefits without undermining their existing China ties.
However, the very flexibility that enabled these agreements also makes their long-term implementation uncertain . Their success will depend not only on US policy consistency but also on ASEAN nations' balancing strategies and the evolving dynamics of global trade .
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