Trump unveils flurry of Asia trade pacts ahead of Xi meet
Speaking at the Association of Southeast Asian Nations (ASEAN) meeting held in Kuala Lumpur on Sunday, Trump said, “My message to Southeast Asian countries is that the United States is with you 100% and we plan to be a strong partner and friend for generations to come.” he said.
The US president suspended exemptions from the reciprocal tariff regime for major exports from Thailand, Cambodia, Vietnam and Malaysia as part of the agreements. He also expressed optimism during his meeting with Brazilian President Luiz Inacio Lula da Silva that they could easily strike a trade deal as the Latin American country seeks to reduce the 50 percent customs duty imposed on many of its products.
The White House’s hope is that the framework trade agreements planned to be signed into law in the coming weeks can strengthen Trump’s hand before he meets with Xi in South Korea this week. Ahead of this summit, Beijing cut soybean purchases and imposed new restrictions on critical mineral exports, earning Trump’s ire and threatening to shake the US economy.
Yet insufficient detail provided in many framework agreements made it difficult to measure their ultimate impact. While countries have agreed to roll back tariffs and regulations on the purchase of US goods, negotiations will continue over what relief they will be given and whether key sectors such as apparel and electronics will take a break.
Referring to questions about rules of origin, sectoral tariffs and transfer duties on mutual agreements, Peter Mumford of Eurasia Group, which covers Southeast Asia within the scope of risk consultancy, said: “It is a step in the right direction, but there is still serious uncertainty.” “And none of these are legally binding agreements. They’re all pretty flexible agreements.”Southeast Asia is now a larger source of goods for the United States than China, underscoring the potential importance of the agreements signed on Sunday. This is especially true for Vietnam, which is rapidly emerging as one of the largest exporters to the United States. The agreement with Cambodia confirms that the country will eliminate all tariffs on industrial products as well as food and agricultural imports from the United States. In response, the White House has identified hundreds of products that it plans to exempt from the 19 percent customs duty that Trump imposed on Cambodian goods.
Cambodia is “pleased” with the agreement but hopes the nation will also lower rates on U.S. apparel, shoes and travel products, Cambodian Deputy Prime Minister Sun Chanthol said in a text message. The garment industry accounts for more than half of Cambodia’s exports.
“We want to thank President Trump for granting us the reciprocal rate that allows us to compete and expand our trade and investment,” Sun Chanthol said. he added.
The White House also reached a deal with Thailand that would eliminate tariffs on 99% of U.S. goods, including all industrial, food and agricultural products. The US will soon designate a number of Thai products it plans to exempt from reciprocal tariffs. Like Cambodia, exports from Thailand currently face a 19% rate. The two countries also signed a critical minerals agreement that should offer U.S. companies privileged access to rare earths, important minerals used to produce high-tech products such as semiconductors and jet engines.
