US President Donald Trump arrived in Southeast Asia touting what the White House called “historic” trade agreements. But a closer look suggests a decidedly asymmetric outcome — one that tilts heavily in Washington’s favour while leaving Southeast Asian partners with uncertain returns.

During a flurry of announcements in Kuala Lumpur, Trump confirmed completed trade agreements with Malaysia and Cambodia, along with initial frameworks for deals with Thailand and Vietnam.

The arrangements provide the US with clear strategic and economic victories:

• Removal of various tariff and non-tariff barriers to US products
• Major purchase commitments from regional companies for American goods

By contrast, Southeast Asian nations did not secure lower tariff rates than the 19-20% duties imposed by the US in the first place. While some Malaysian and Cambodian products will receive exemptions, the scope is narrow and highly conditional.

Uneven Benefits and Economic Trade-Offs

Analysts warn the deals impose significant obligations on ASEAN economies already grappling with global tariff pressures.

Bloomberg Economics described the agreements as “one-sided, with clear costs and vague benefits.”

Malaysia’s case illustrates the imbalance. Barclays estimates roughly US$12 billion of Malaysian exports fall under the exemption list — but only around US$1 billion (0.2% of GDP) will realistically enjoy zero-tariff access due to strict limitations.

Malaysia’s equity market dipped following the announcement, signalling investor caution despite earlier optimism. The ringgit, however, saw a slight uptick.

Heavy Purchase Commitments and Currency Alignment

The agreements go well beyond tariff concessions. Malaysian firms committed to nearly US$150 billion in purchases of US semiconductors, data-center systems, and aerospace equipment.

The US Treasury and Bank Negara Malaysia are also finalizing a currency policy understanding aimed at ensuring what Washington calls a “fair economic relationship.”

Trade experts note the scale of commitments requested by the US is substantial.

“The counterparties are agreeing to do a lot of difficult things… and in exchange for what?” one analyst asked, describing the trade-offs as “puzzling.”

US–China Tensions in the Background

The deals come as Trump maintains tariff pressure on China. ASEAN’s rising importance — the bloc now supplies more goods to the US than China — adds strategic weight.

Vietnam remains central, accounting for nearly half of ASEAN export gains to the US. Yet questions linger over which Vietnamese goods qualify for exemptions and how Washington will police transshipment — the rerouting of Chinese goods through third countries to avoid tariffs. Goods deemed transshipped could face 40% duties, a detail that heightens uncertainty for regional exporters.

Malaysia’s trade minister confirmed the issue remains unresolved.

Cambodia welcomed the deal but hopes for broader exemptions for garments and footwear. Thailand stressed that its framework remains non-binding, with negotiations continuing through year-end.

Malaysia’s Reaction

Trade Minister Tengku Zafrul Aziz said the deal improves market access for palm oil, cocoa, and pharmaceuticals, while Prime Minister Anwar Ibrahim highlighted potential talks on semiconductor tariffs.

“It exceeded expectations — the trust and commitment were clear,” Anwar said after meeting Trump.

A Calculated Bargain for ASEAN

Economists argue the concessions may be a necessary price for tariff relief in export-dependent economies — but at the cost of exposure to US policy terms.

HSBC noted that other Asian governments will likely examine the Southeast Asian agreements closely, concluding that greater market access for US goods and binding purchase pledges may be the new price of entry into tariff easing under Trump.

Key Takeaways