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If you thought the international economic stage couldn’t get any more theatrical, brace yourself: President Donald Trump may soon deliver the next act in the drama known as U.S.-China trade relations. With an anticipated summit with Chinese leader Xi Jinping just days away—and a potential TikTok lifeline hanging in the balance—the script is being rewritten across Asia at breakneck speed.
Trump Signs Regional Trade Deals as ASEAN Looks On
On Monday, President Trump revealed that Washington and Beijing are poised to “come away with” a much-awaited trade deal ahead of his expected meeting with Xi Jinping. Making Malaysia his first stop, Trump didn’t just sample the local cuisine—he inked separate trade and mineral agreements with Malaysian and Cambodian leaders, and framework deals for trade pacts with Thailand and Vietnam.
These four nations sit at the core of the Association of Southeast Asian Nations (ASEAN), an 11-member regional bloc. Their collective pledge? To remove trade barriers, offer preferential market access for U.S. goods, and boost purchases of American agricultural and energy products, along with U.S.-made aircraft. Commitments also span cooperation around export controls, sanctions, and access to critical minerals—a pointed move in a region where Chinese influence keeps growing.
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But before you break out the confetti, Wendy Cutler, senior vice president at Asia Society Policy Institute, weighs in: the agreements focus more on “cooperation rather than hard commitments,” and many of the important points are “considerably shorter” compared to previous U.S. trade deals. Translation: progress, yes, but don’t raise your hopes for ironclad promises just yet.
Tariffs, Critical Minerals, and Market Access: What’s on the Table?
Joint statements confirm that under these agreements, the U.S. will keep a 19% tariff on most exports from Malaysia, Cambodia, and Thailand, though some products will sneak in tariff-free. Vietnam’s tariffs remain at 20%, but with some goodies eligible for duty-free access. Notably, Vietnam—which chalked up a $123 billion trade surplus with the U.S. last year—pledged to ramp up purchases of American products, trying to nudge that stubborn trade imbalance down.
Vietnam sits on a rare earth treasure trove but has enforced a strict moratorium on exporting unprocessed rare earths, focusing instead on developing domestic industries and staving off resource plundering. Thailand, eager for more American business, will ease tariff barriers on U.S. goods such as vehicles, medical devices, and pharmaceuticals, and will begin importing ethanol for fuel. The country is even relaxing foreign ownership limits for U.S. investors in telecom—a possible boon for American businesses eyeing new frontiers.
- Some sectors, like pharmaceuticals and electronics, remain under tight protection, with sectoral tariffs staying put for now.
- The agreements leave the door open for future exemptions, according to economist Michael Wan at MUFG Bank.
- Legal questions also swirl around Trump’s use of emergency powers to impose these tariffs—a subplot worth watching.
Diplomacy and a Surprising Ceasefire
Trade talks weren’t the only marquee act. Trump also announced he’d formalized an extended truce between Thailand and Cambodia, building on a ceasefire he brokered in July following violent border clashes last summer. Channeling his inner peacemaker, Trump didn’t miss the chance to tout his role: “We saved maybe millions of lives.” Whether or not the Nobel Prize committee is on speed-dial remains, for now, a mystery.
Meanwhile, as Trump exchanged handshakes in Malaysia, U.S. and Chinese negotiators were locked in high-stakes talks on the sidelines of the ASEAN summit. These behind-closed-doors meetings produced a framework for negotiations before Trump and Xi’s meeting in South Korea. Chinese chief trade negotiator Li Chenggang shared that a preliminary consensus had emerged after “very intense discussions” that tackled export controls, fentanyl, and shipping fees.
The TikTok Decision and Whispers of Tariff Relief
Just as the suspense reached a fever pitch, U.S. Treasury Secretary Scott Bessent stepped into the spotlight, telling CBS that Trump’s threat of 100% tariffs on Chinese goods was “effectively off the table” following a “very good two-day meeting” with Chinese officials. In more good news for TikTok fans, Bessent told ABC he expects China to delay rare earth export controls by one year—a potential show of goodwill as a deal allowing TikTok’s continued U.S. operation is floated for Trump and Xi to “consummate.” (And no, there are no reports of dance challenges on the negotiation table.)
Economists like Ting Lu at Nomura are cautiously optimistic, suggesting that both sides, after testing each other’s limits, will likely make fresh concessions—and that the previously threatened 100% tariffs on Chinese goods are “surely not” going to be deployed while an extension to the current tariff truce seems likely.
Conclusion: As the world awaits the outcome of these high-wire talks, one thing is clear: in trade diplomacy, surprises are always in store. Keep your eyes on Trump and Xi’s next move—the future of American exports, TikTok videos, and maybe even the world’s rare earths could hang in the balance. Don’t blink.
