KUALA LUMPUR – In a landmark diplomatic triumph on the sidelines of the 47th Association of Southeast Asian Nations (ASEAN) Summit, the United States signed reciprocal trade agreements with Malaysia and Cambodia, alongside a critical minerals cooperation framework with Thailand, just hours after overseeing the formalization of a peace accord between Cambodia and Thailand. The events, held on Sunday in the Malaysian capital, underscored President Donald Trump's aggressive push for economic diversification in the Indo-Pacific region, while reinforcing U.S. commitments to regional stability.
President Trump, who returned to the White House in January 2025 following his reelection victory, presided over the ceremonies alongside Malaysian Prime Minister Anwar Ibrahim, Cambodian Prime Minister Hun Manet, and Thai Prime Minister Anutin Charnvirakul. The gatherings took place at the Kuala Lumpur Convention Centre, a venue buzzing with delegates from across Southeast Asia. Trump, fresh off a six-day Asian tour aimed at countering China's influence, hailed the day's proceedings as "a monumental step for peace and prosperity." "We did something that a lot of people said couldn’t be done," he remarked, referring to his role in mediating the border dispute that had simmered for decades but erupted into deadly clashes in July 2025.
The Kuala Lumpur Peace Accords, as Trump dubbed the agreement, build on an initial ceasefire signed on July 28, 2025, which halted a five-day border skirmish that claimed at least 40 lives and displaced over 200,000 civilians. That conflict, centered around disputed territories like the Chong Bok area near Ubon Ratchathani province in Thailand, involved artillery exchanges and landmine incidents, including one that severed a Thai soldier's ankle on July 16. The renewed hostilities stemmed from longstanding claims over ancient Khmer ruins and resource-rich border zones, exacerbated by nationalist sentiments on both sides. ASEAN's intervention, led by Malaysia as the 2025 chair, facilitated talks, but it was Trump's direct involvement—through high-level phone calls and tariff threats—that accelerated progress.
Under the accords, Thailand committed to releasing 18 detained Cambodian soldiers, a gesture hailed as a "landmark achievement for international diplomacy." Both nations agreed to withdraw heavy weapons from the border, initiate landmine removal operations, and deploy ASEAN observers to monitor compliance. Thai Foreign Minister Sihasak Phuangketkeow described it as a "pathway to peace," emphasizing bilateral negotiations while acknowledging U.S. facilitation. Cambodian Prime Minister Hun Manet, whose government nominated Trump for the Nobel Peace Prize in August 2025 for his mediation efforts, called the signing a "historic day" that would foster cross-border trade and civilian returns. Trump tied the peace to economic incentives, stating, "The United States will have robust commerce and cooperation... with both nations, as long as they live in peace."
The trade deals, announced immediately following the peace ceremony, represent a strategic pivot in U.S. policy to secure supply chains for semiconductors, rare earths, and other critical minerals amid escalating tensions with China. Beijing's recent export restrictions on rare earths—vital for electronics, electric vehicles, and defense technologies—prompted these pacts, which explicitly target "unfair trade practices of third parties." U.S. Trade Representative Jamieson Greer, who led negotiations, described the agreements as "landmark deals" that maintain protective tariffs while opening markets for American exporters.
With Thailand, the joint statement outlines a "framework for a U.S.-Thailand agreement on reciprocal trade," targeting tariff negotiations for completion by December 2025. Thailand pledged to eliminate tariffs on 99% of U.S. goods, from agricultural products to industrial machinery, in exchange for the U.S. imposing a uniform 19% reciprocal tariff on Thai imports—a rate designed to address the $45.4 billion U.S. goods trade deficit in 2024. Bilateral goods trade reached $81.2 billion last year, with U.S. exports at $17.9 billion and imports at $63.3 billion, dominated by Thai electronics and auto parts.
Complementing the trade framework is a memorandum of understanding (MoU) on critical minerals, focusing on Thailand's nickel, cobalt, and lithium deposits. The pact promotes joint governance reforms, U.S.-Thai corporate partnerships, and technical exchanges to integrate Thailand into "secure global supply chains." Charnvirakul emphasized its role in "resilient and sustainable supply chains for years to come," while committing to protections against non-tariff barriers, labor rights enforcement, and environmental standards. As part of broader commitments, Thailand agreed to procure 80 Boeing aircraft valued at $18.8 billion, bolstering U.S. aerospace jobs.
The U.S.-Cambodia reciprocal trade agreement mirrors this structure, with Phnom Penh eliminating tariffs on 100% of U.S. industrial and agricultural goods, offset by the same 19% U.S. tariff on Cambodian exports. Last year's bilateral trade totaled $13.0 billion, with a stark U.S. deficit of $12.3 billion driven by Cambodian apparel and footwear imports. The deal tackles non-tariff barriers, digital trade facilitation, intellectual property safeguards—including geographical indications—and state-owned enterprise reforms. It also mandates adherence to internationally recognized labor rights, a nod to Cambodia's garment sector vulnerabilities.
A highlight is Air Cambodia's partnership with Boeing to modernize the nation's aviation infrastructure, potentially creating thousands of jobs and enhancing connectivity. Trump praised the pact as "great for both countries," linking it to post-conflict reconstruction. Hun Manet echoed this, noting how tariff relief would boost U.S. machinery and tech exports to Cambodia's growing manufacturing base.
The most comprehensive agreement came with Malaysia, billed by Trump as a "historic" trade deal coupled with a critical minerals MoU. Kuala Lumpur granted "significant preferential access" for U.S. exports in chemicals, machinery, metals, vehicles, agriculture, and fuel ethanol, while pledging to dismantle non-tariff barriers, enforce anti-counterfeiting measures, and eradicate forced labor. In a key concession, Malaysia committed to refraining from export bans or quotas on critical minerals and rare earths to the U.S.—a direct counter to its prior restrictions on raw materials, given its 16.1 million tonnes of deposits. Greer highlighted the MoU's focus on "free and resilient" investments, essential for U.S. manufacturing and tech sectors.
Commercial windfalls include Malaysia's procurement of 30 Boeing aircraft with options for 30 more; $150 billion in investments for semiconductors, aerospace components, and data centers; up to $3.4 billion annually in U.S. liquefied natural gas; and $70 billion in capital funds over the next decade. These build on 2024's $80.1 billion goods trade, where U.S. exports surged 43.1% to $27.6 billion amid rising demand for machinery and aircraft.
Analysts view these pacts as a multifaceted U.S. strategy. "They obligate partners to align on investment screening, export controls, and tariff evasion against China," noted a Politico report, marking a shift from multilateral forums like the Trans-Pacific Partnership. Economists predict a 15-20% boost in U.S. exports to the region by 2027, per USTR projections, while fostering labor and environmental safeguards. Yet challenges loom: Nationalist backlash in Thailand could test compliance, and China's retaliatory measures might strain ASEAN unity.
As Trump departed for Japan, the summit's momentum rippled through markets. Boeing shares rose 2.3%, and rare earth futures dipped on diversification news. For Southeast Asia, the deals signal a new era of U.S. engagement—peace secured not just by diplomacy, but by the promise of shared prosperity. With Trump's tour continuing to Vietnam and South Korea, observers anticipate further frameworks, potentially culminating in talks with Chinese President Xi Jinping on technology and trade.
