Trump finalizes trade deals with 2 Southeast Asian countries

The United States announced finalized trade deals Sunday with two Southeast Asian nations — Cambodia and Malaysia — that contain provisions aimed against China, and further progress with two others in the region, Thailand and Vietnam.

The news came as President Donald Trump was in Malaysia for a regional leaders summit, and just days before Trump is set to meet with Chinese President Xi Jinping.

The fast-growing Southeast Asia region is a crucial trading partner for both China and the United States and is caught in the middle of trade tensions between the world’s two largest economies — as evidenced by some terms of the new pacts.

The two final deals and two framework agreements announced Sunday cover about 68 percent of approximately $475 billion in U.S. two-way trade with the 10 members of the Association of Southeast Asian Nations.

Trump threatened high tariffs on the four countries, along with others around the world, to prod them into making policy reforms to open their markets to more U.S. goods and services. In exchange for those concessions, he reduced the tariffs he threatened to impose but still will be levying duties of either 19 percent or 20 percent on the four countries.

“These landmark deals demonstrate that America can maintain tariffs to shrink the goods trade deficit while opening new markets for American farmers, ranchers, workers, and manufacturers,” U.S. Trade Representative Jamieson Greer said in a statement.

Trump announced in July the U.S. had reached a deal with Vietnam, the biggest U.S. trading partner in Southeast Asia, but questions quickly emerged about the agreement after the two sides failed to release a joint statement spelling out details of the pact.

The U.S.-Vietnam “framework” announced Sunday provides some of those details but also notes the two sides will continue to work in coming weeks to finalize the pact.

The documents released Sunday by Greer’s office seem to reflect Vietnam’s concerns about alienating China in order to please the United States.

According to the fact sheet, the two sides “committed to strengthening cooperation towards our shared goals to enhance supply chain resilience, including addressing duty evasion and cooperating on export controls.”

That vague language, most likely aimed at China, seems softer than the finalized text of the agreements with Malaysia and Cambodia. 

Those new pacts, with differing details, more explicitly obligate Malaysia and Cambodia to cooperate with the United States against targeted “third countries” in areas like investment screening, export controls and tariff evasion.

The U.S.-Thailand framework also contains a paragraph that indicates its final terms could be similar to the U.S. pacts with Malaysia and Cambodia.

“The United States and Thailand will strengthen economic and national security cooperation to enhance supply chain resilience and innovation through complementary actions to address unfair trade practices of third parties, and cooperate on export controls, investment security, and combatting duty evasion,” the U.S.-Thailand joint statement said.

Back in July, Trump hailed preliminary agreements with two other Southeast Asian nations — Indonesia and the Philippines. No additional progress on those agreements was announced Sunday. The U.S. and Indonesia have already released a joint statement outlining the key details of their framework, but not the U.S. and the Philippines.