Jakarta, CNN Indonesia --

The United States (US) signed a series of agreements on trade and critical minerals with four Southeast Asian partners on Sunday (26/10).

As reported by the Straits Times, this step was taken to address trade imbalances and diversify supply chains, especially amid increasingly stringent restrictions on rare earths exports from China.

US President Donald Trump, who is in Kuala Lumpur, Malaysia, to attend the Association of Southeast Asian Nations (ASEAN) summit, signed reciprocal trade deals with his counterparts from Malaysia and Cambodia.

In addition, Trump also agreed to a trade framework memorandum of understanding with Thailand that requires the countries to work together to address tariff and non-tariff barriers.

The United States will maintain 19% tariffs on exports from the three countries under the deal, although they will be reduced to zero on some goods, according to a joint statement released by the White House.

Washington also announced a similar framework agreement with Vietnam, which previously imposed a 20% tariff on its exports to the US.

Vietnam, which recorded a trade surplus of US$123 billion with the US last year, has pledged to significantly increase purchases of US products to narrow the trade gap between the two countries.

Malaysia Confirms No Ban on Critical Mineral Exports to the US

Trump also signed two separate deals on Sunday (October 26) with Thailand and Malaysia seeking cooperation to diversify critical mineral supply chains, amid Beijing's growing competition in the fast-growing sector.

Reuters exclusively reported this month that China was in talks with Kuala Lumpur over rare earth mineral processing, with Malaysia's sovereign wealth fund, Khazanah Nasional, expected to partner with a Chinese company to build a refinery in Malaysia.

China, as the world's largest miner and processor of rare earth minerals, has imposed increasingly stringent export controls on its refining technology.

This has prompted global manufacturers to rush to find alternative supply sources for the critical mineral widely used in semiconductor chips, electric vehicles and military equipment.

Malaysia agreed to refrain from banning or imposing quotas on exports of critical minerals or rare earth elements to the US. However, the statement did not specify whether Malaysia's commitment applies to raw or processed rare earth elements.

Malaysia itself has rare earth mineral reserves of around 16.1 million tonnes, and the country has banned the export of raw rare earth minerals to prevent resource loss while working to develop its downstream sector.

(wiw)