US President Donald Trump’s first stop at Malaysia on Sunday during his Asia tour was marked by signing a trade agreement and a critical minerals deal with Malaysian Prime Minister, Anwar Ibrahim.
US Trade Representative Jamieson Greer said Malaysia “is going to be modifying its tariffs and non-tariff barriers, and we intend to have a lot more trade.”
With an eye at enhancing trade in the Southeast, Greer, and Treasury Secretary, Scott Bessent, also met Chinese Vice Premier, He Lifeng, during the ASEAN summit.
The latest meeting, the fifth in-person discussion since May, set the stage for a “productive meeting” between Trump and his Chinese counterpart, Xi Jinping that is due to take place later in the week, reported a leading international news agency. China’s top trade negotiator, Li Chenggang, is also said to have participated in the discussions.
As both China and the US aim to reduce trade tensions, there’s renewed hope that an agreement between two of the world’s largest economies may be in the offing.
“I think that we’re getting to a spot where the leaders will have a very productive meeting,” Greer was quoted as saying.
Also Read: US, China agree to hold fresh trade talks
On the topic of rare earths, which China has imposed greater restrictions on, and which triggered the latest face-off between China and the US, Greer confirmed it came up during their discussions on extending the trade truce.
Early this month, Trump had threatened to impose additional 100 per cent tariffs on Chinese goods, along with other trade restrictions, from November 1, after China significantly increased export controls on rare earth magnets and minerals.
But, with Trump kicking-off his Asia trip, which is expected to conclude in South Korea with a face-to-face meeting with Xi on October 30, the world could be looking at a calmer global trade environment in the coming times.
Although the White House has officially announced the much-anticipated Trump-Xi talks, Beijing has not yet confirmed that the two leaders will meet.
If it does happen, Washington is expected to include discussions on soybean purchases, concerns about Taiwan, and the release of Hong Kong media tycoon Jimmy Lai.
Trump is also learnt to have sought China’s assistance in negotiating with Russia, as Washington tightens its grip over Kremlin’s finances to deter its war with Ukraine, which nears its fourth year.
A trade truce between China and the US was first reached this year in May, following the Geneva talks. While it was extended in August, it failed to stop the two countries from imposing restrictions on trade of rare earth, semiconductor chips, and slapping sanctions on each other.
China’s control over rare earth minerals has led to a global shortage, prompting the Trump administration to threaten restriction of critical software to China.
What’s the deal?
According to joint statements released by the White House, the United States would maintain a tariff rate of 19 per cent on most exports from all three countries under the deals.
The pacts signed by Trump with Thailand and Malaysia seek cooperation to diversify critical minerals supply chains, as per reports, with Malaysia agreeing to refrain from banning or imposing quotas on exports of critical minerals or rare earth elements to the United States, the countries said in a statement.
It did not, however, specify whether Malaysia’s pledge applied to raw or processed rare earths. The country has an estimated 16.1 million tonnes of rare earth deposits.
It banned companies from exporting raw rare earths to prevent the loss of resources, as it looks to develop its downstream sector, including with assistance from China.
Under the deal with the US, Kuala Lumpur also agreed to provide significant preferential market access for industrial goods (including chemicals, machinery and passenger vehicles) and agricultural imports (such as dairy and poultry) from the United States, the statement said.
Malaysia, a Muslim-majority country that’s recognised as a global leader in halal certification, also agreed to streamline requirements for US products such as cosmetics and pharmaceuticals, the statement shared.
Meanwhile, Thailand said it would eliminate tariff barriers on approximately 99 per cent of goods, including US industrial and food and agricultural products, both countries said.
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