THE ASIAN PACTS, Pg10.

Key Highlights:

• US President Donald Trump visited Asia, including Malaysia, Japan, and South Korea, marking his first visit to the region since 2017.
• Trade and critical minerals agreements were signed with Malaysia, Cambodia, Thailand, and Vietnam, aiming to reduce non-tariff barriers.
• China announced an upgrade to its free trade agreement with ASEAN, with bilateral trade reaching $771 billion last year.
• An agreement with Japan focused on securing the supply of critical minerals and rare earths.

Detailed Insights:

• The US seeks to stabilize economic ties with Southeast Asia, a major export market, after months of tariff threats and trade disputes.
• US imports from ASEAN reached $352.1 billion in 2024, a significant increase from approximately $140 billion in 2017.
• The agreements aim to diversify the sources of critical minerals for the US, following China's tightening of export controls on rare earths.
• A potential meeting between Trump and Xi Jinping is anticipated at the APEC summit in Gyeongju, South Korea, to discuss the ongoing trade war.
• The US threatened to impose new 100 per cent tariffs on Chinese goods in retaliation for Beijing’s rare earths export controls.
• India may need to recalibrate its China strategy depending on the outcome of the US-China trade discussions and should focus on improving relations with the US.

Key Concepts Involved:

• Tariff: A tax or duty imposed on goods when they are moved across a political boundary.
• Free Trade Agreement: An agreement between two or more countries to reduce or eliminate trade barriers.
• Critical Minerals: Minerals essential to modern technologies and supply chains, with supply risks.