Washington strengthens partnerships at ASEAN Summit

At the summit, US President Donald Trump concluded several bilateral agreements with Malaysia, Thailand and Cambodia, after also signing a ceasefire agreement between the latter and Thailand.

The agreements signed provide for a reciprocal tariff cap between the United States and these three countries at 19%, compared with 25% originally envisaged. The aim is to preserve the volume of exports to the United States, estimated at several tens of billions of dollars per year.

One of the major components of these agreements is the supply of rare earths, a strategic issue for US industry. Malaysia undertook to lift quotas on its exports, thereby allowing the United States to circumvent the restrictions imposed by China. The country is also planning to accelerate the development of its critical minerals sector, in partnership with U.S. companies, including by extending mining licences to increase production.

Malaysia has approximately 16.2 million tons of untapped rare earth reserves. However, a moratorium on exports of raw minerals, which had been in place since 2024, was intended to encourage their processing in the national territory.

The US is seeking to secure its critical mineral supply chains in the face of China's dominance in this sector. Beijing, which has a quasi-monopoly on world rare earth production, recently strengthened its restrictions on exporting technologies related to these minerals, fuelling new trade tensions with Washington.

In response, the United States concluded a non-binding Memorandum of Understanding with Thailand to strengthen its cooperation in the rare earth trade. At the same time, the European Union is also stepping up initiatives to reduce its dependence on Chinese supplies.

These agreements reflect the desire of the United States to diversify its sources of scarce earth supply and limit its dependence on China, while strengthening its economic partnerships with Southeast Asia.

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