US President Donald Trump recently concluded his first Asia tour since returning to office, amid growing concerns over tariffs, tensions with China and their broader implications for global trade. The recent trip aimed to secure economic deals and reaffirm US interests and partnerships across the region. Trump’s approach reflects bolstering US leverage and influence in the region while pursuing efforts to mitigate risks and recalibrate the nature of cooperation.
The most anticipated meeting of Trump’s Asia tour was with Chinese President Xi Jinping in Busan, where both leaders sought to ease tensions that have had significant implications for global trade. China agreed to suspend its earlier retaliatory measure of rare earth export restrictions for one year and pledged to curb fentanyl precursor exports to the United States. In return, Washington agreed to reduce select tariffs on China. Beijing also agreed to resume importing US agricultural products. As both countries vie for greater dominance, it is clear that both are unwilling to respond to each other’s pressure tactics, rather they are willing to play the long game. As per reports, Beijing is preparing a new “validated end-user” (VEU) licensing regime that would continue to restrict shipments of rare earths to US military-linked firms while easing access for vetted civilian companies. Such a policy could affect US and European manufacturers with both civilian and defense clients, further complicating supply chains for critical materials. Trump signaled openness to easing restrictions on Chinese access to US technology; however, he said that the semiconductor trade talks with Xi did not include advanced AI processors, which remain restricted under US export rules. Nvidia CEO Jensen Huang’s statement that US export regulations prohibit Blackwell chip shipments to China further confirmed the US position. Both sides made cautious concessions on tariffs, rare earth exports and broader trade dynamics. For now, it appears that both Washington and Beijing are seeking to tacitly manage immediate risks and calibrate their responses, even as the underlying strategic rivalry continues to define the trajectory of their engagement as well as its impact on global trade.
Trump’s latest wave of reciprocal trade agreements during his Asia tour once again highlights US insistence on leveraging economic ties to achieve strategic objectives and conditional cooperation that reinforces US influence. Building upon the framework established under Executive Order 14346, the agreements and potential frameworks with Vietnam, Malaysia, Cambodia and Thailand show Washington’s effort to institutionalize preferential market access and deepen economic alignment with key Southeast Asian partners. Collectively, these pacts signify a shift from punitive, tariff-driven confrontations to a framework of negotiated reciprocity. Trump’s initial pressure tactics have compelled these countries to pursue trade deals with the United States.
The United States and Thailand launched a trade framework under which Thailand will purchase over $20 billion in US aircraft, agricultural and energy products, while removing tariffs on most US goods, and the United States will grant zero tariffs on select products while maintaining the 19% tariff. Similarly, the United States and Vietnam agreed on a framework for reciprocal and balanced trade, maintaining 20% tariffs on most Vietnamese goods but reducing some to zero, with Vietnam offering preferential access for US products. A similar proposal was reached with Malaysia as well; however, several Malaysian lawmakers expressed their concerns over the deal, alleging it to be significantly lopsided in favor of the United States.
The United States and Cambodia also reached an agreement under which Cambodia committed to eliminating tariffs on all US industrial, food, and agricultural products, while the United States agreed to grant zero tariffs on select items. Trump also mediated a ceasefire between Thailand and Cambodia after five days of deadly border clashes in July that killed at least 43 people and displaced over 300,000 civilians. However, tensions have since resurfaced. Recently, Thailand suspended the implementation of the US-brokered peace deal after two Thai soldiers were injured by a landmine blast near the border. While Trump’s intervention temporarily halted hostilities, the underlying dispute between the two neighbors remains unresolved, leaving the fragile peace at risk of renewed conflict.
Perhaps the most significant and far-reaching aspect of Trump’s approach lies in his security policy. Security developments in the region have become a major concern due to China’s assertive actions. The recent US approach in negotiations sought to address some of these issues; however, there is still not much clarity on the extent to which the United States might be willing to bear security responsibilities beyond its strategic interests. Furthermore, any effective pushback against China would necessitate US engagement through multilateral frameworks, an approach that Trump has shown little interest in and which does not align with his preferred style of diplomacy.
During his Asia tour, Secretary of Defense Pete Hegseth strengthened US defense ties with Malaysia, India and Cambodia and launched Task Force Philippines to boost regional interoperability. Trump also reaffirmed the US-Japan alliance at the APEC conference in South Korea, emphasizing shared commitments to a free and open Indo-Pacific. Trump and Prime Minister Sanae Takaichi highlighted Japan’s expanding defense role, with the United States expediting delivery of AMRAAM missiles. The United States and Japan discussed ways to deepen military cooperation and joint training amid regional tensions and China’s growing military presence. Also, Trump and South Korean President Lee Jae Myung announced progress on trade and security talks. South Korea agreed on a $350 billion investment plan, with $200 billion in cash installments and $150 billion for shipbuilding. Trump approved South Korea to build nuclear-powered submarines in the United States, marking a major shift in bilateral security ties. President Lee also announced an 8.2% increase in defense spending, the largest in six years, bringing the budget to 66.3 trillion won ($47.1 billion).
The recent developments reflect continuity in US defense engagement across Southeast Asia and the broader Indo-Pacific, signaling that despite concerns and uncertainties, the United States remains invested in maintaining strategic influence. Trump’s approach remains focused on insisting that the regional countries increase their defense spending. The effectiveness of this approach will depend on Washington’s ability to reassure its regional partners and demonstrate sustained commitment beyond transactional engagement.
Southeast Asian nations face mounting pressure from both Washington and Beijing, as US tariffs target Chinese transshipments and Chinese goods dominate regional markets. While Trump’s recent ASEAN trade deals signal closer US engagement, the region remains deeply tied to China through investment, supply chains and trade. The economic landscape of Southeast Asia is increasingly shaped by intensifying US-China rivalry, with trade agreements being leveraged as key instruments of influence. During the recent ASEAN summit, China and ASEAN upgraded their free trade agreement to the “3.0 version,” expanding cooperation into infrastructure, digital economy and green transition. Premier Li Qiang criticized US protectionism, signaling China’s aim to present itself as a stable regional partner during the recent ASEAN-China summit. China-ASEAN trade has witnessed significant growth, with trade reaching $785 billion in the first nine months of 2025. Although China is ASEAN’s largest trading partner, the United States continues to hold a substantial presence, with $571.7 billion in total trade in 2024 and a key role as a security and defense partner.
In the current geopolitical context, US-China rivalry is likely to complicate regional hedging strategies as Southeast Asian countries will find it difficult to balance their longstanding economic ties and investments with China while maintaining favorable relations with the United States. For Washington’s Indo-Pacific allies, defense and security partnerships remain a strategic priority, and Washington’s transactional approach, coupled with increasing security challenges, has compelled them to boost defense spending and direct substantial investments toward the United States. This is something Trump has frequently highlighted as a political and economic achievement. The trajectory of this approach will largely depend on evolving US-China relations, the durability of regional security commitments and the extent to which these countries can diversify their economies. Domestic political opinion regarding the US approach further adds to the pressure on the governments of regional countries. Taking these factors into consideration, the responses of regional governments will inevitably shape the balance of power in the Indo-Pacific, with far-reaching implications for regional stability.
