Editor’s note: In this edition of Asia Policy Brief, Faye Simanjuntak, Schwarzman Fellow at ASPI, explores how ASEAN is navigating the United States’ Pax Silica initiative. She argues that the region is currently hedging its bets, though ASEAN’s new Digital Economy Framework Agreement (DEFA) may provide a platform for the region to negotiate terms as a bloc.
State of Affairs: Pax Silica Expands
In a recent essay on Substack, U.S. Under Secretary of State for Economic Affairs Jacob Helberg denounced digital sovereignty as “backward and counterproductive,” arguing instead for countries to depend on strong partnerships with the United States through the Pax Silica initiative.
Pax Silica is framed as the State Department’s “flagship effort” to secure the AI supply chain, described as a “positive-sum partnership,” though it has a stated purpose to “reduce coercive dependencies” relating to the AI and semiconductor supply chain—the coercive actor is heavily implied to be China. First convened in December 2025, the inaugural Pax Silica summit in Washington D.C. had seven countries as first signatories on its eponymous Declaration.
India signed in February of this year, bringing its semiconductor design talent and processing capacity for critical minerals, and added political weight as a Quad member. The Philippines joined in April as the second country from Southeast Asia after Singapore, with the commitment anchored by a 4,000-acre Economic Security Zone in the Luzon Economic Corridor—the first “AI-native” industrial hub under the initiative.
By the second Pax Silica Summit in June 2026, membership had reached 24 signatories, yet the Philippines and Singapore remain the only Southeast Asian countries to sign on. Other ASEAN states have instead prioritized establishing binding trade deals with notable critical mineral provisions: Malaysia and Cambodia both signed reciprocal trade agreements with the U.S. in October 2025, followed by Indonesia in February 2026.
Southeast Asia reads Pax Silica as an American bid to further accumulate geopolitical weight in the AI era vis-a-vis China, rather than a framework built to deliver enforceable economic terms. Their response follows the region’s long-standing playbook for navigating U.S.-China competition: countries are hedging, viewing Pax Silica membership as a bet on visible alignment with Washington as opposed to solely a platform for extracting tangible benefits.
Why it Matters: A Better Deal Together?
While Singapore and the Philippines are the only Pax Silica signatories from Southeast Asia, the 2026 ISEAS survey on Southeast Asian opinions shows divergent logic behind each of their decisions. The Philippines has always been the most skeptical of China within ASEAN: 76.8% of respondents would pick the United States over China if forced to choose, and it’s the only member state expecting its China relations to worsen over the next three years (55.0%). In this sense, Manila likely saw signing onto the agreement as an easy optical win in terms of engagement with the U.S., bolstering the Philippines’ existing security positioning.
Singapore’s decision to sign onto Pax Silica makes less sense in the context of the ISEAS survey but more sense when considering its greater hedging strategy. Based on the survey, 66.3% of Singaporean respondents picked China over the United States in the same question of forced choice this year, up from 47.1% in 2025. Public opinion in Singapore is largely driven by the nation’s trade patterns: China is one of Singapore’s largest trading partners, while the U.S. falls behind. Further bifurcation in support levels between the U.S. and China is likely due in part to increasing anxiety surrounding tariffs and general instability projected by the Trump administration. At the same time, Singapore maintains a strong security relationship with the United States: the two countries have administered a joint military exercise since 1981, and a defense pact that allows American forces to use Singapore’s air and naval bases. For a country balancing a Chinese-leaning economic partnership with an American-leaning security partnership, signing Pax Silica is a low-cost move to stay in favor of both countries by not overcommitting to China.
For signatories, the marginal benefit received by signing the Pax Silica declaration is a stake within a trusted U.S. coalition. However, the trustworthiness of its arrangement has since been thrown into question. In June 2026, Washington abruptly restricted foreign access to Fable and Mythos 5, Anthropic’s most advanced AI models, on national security grounds, with no warning (this decision has since been reversed). Afterwards, India sought reassurance from the United States that this would not happen again. European leaders similarly cited the episode to argue for reducing dependence on models from the U.S.
In this way, bilateral engagement, rather than multilateral engagement led by the United States, has been viewed as a more rational bet for most of Southeast Asia. It captures much of the same economic upside—investment, market access, mineral partnerships—without formal alignment with the U.S. Signing makes the most sense if a state receives something bilateral deals structurally can’t offer—which, for the Philippines, is the dedicated industrial zone.
If more ASEAN countries sign onto Pax Silica, there could be a future in which member states leverage their unity to extract better terms than they get independently. A coordinated bloc could help ASEAN members secure cohesive commitments including downstream processing investment rather than raw extraction, technology transfer provisions attached to industrial zones, or advance-notice guarantees before Washington restricts partner access to frontier models.
The Digital Economy Framework Agreement (DEFA)—which seeks to harmonize digital trade deals across the region in a first-of-its-kind agreement—could serve as a facilitating mechanism for ASEAN to negotiate AI and supply-chain terms within Pax Silica by giving signatories common standards to negotiate from. ASEAN concluded negotiations on DEFA in May 2026, and the agreement is set to be signed in November of this year. However, DEFA’s signing will arrive after, not before, several members would have already locked in individual arrangements with the U.S. regarding critical minerals.
ASEAN’s competing interests could also limit the efficacy of using DEFA as a negotiating lever. Critical minerals production within ASEAN is heavily concentrated in the Philippines and Indonesia, which means the members with the most leverage to negotiate collectively are also the ones with the clearest individual incentive to cut their own deals. Meanwhile, differences in industrialization level and strategic priorities generate varying approaches to critical-mineral governance across the rest of the bloc.
Odds are working against ASEAN being able to leverage DEFA as a collective bargaining tool: the region is fragmented, and its DEFA timeline is too slow for pre-emptive bargaining. However, there is a possibility that joining DEFA will overlap with increased interest in joining Pax Silica among member states. In this case, we might see the region opt to pivot away from hedging when it comes to critical mineral supply chains and instead move towards the U.S.-led Pax Silica order. From this, ASEAN countries might be able to extract concessions that are better adjusted to their needs.
What to Watch
ASEAN and Pax Silica: As new signatories continue to join Pax Silica, it will be important to follow whether Indonesia, Malaysia, or Thailand eventually sign the Pax Silica declaration, or if they continue extracting bilateral minerals deals while staying formally outside of it.
DEFA ratification: DEFA is set to be signed in November, but signature is not ratification. It will be interesting to see the cadence at which states ratify, given sensitive issues such as data localization skepticsm over DEFA’s effectiveness. Singapore, ASEAN’s only founding Pax Silica signatory, will assume chairmanship of ASEAN during DEFA’s first year in force. Watch how Singapore steers the bloc in digital trade partnerships and whether members treat DEFA’s harmonized standards as a shared baseline for external negotiations.
Civil society’s reactions: In Manila, protests against the Special Economic Zone and greater alignment of the Philippines with Pax Silica erupted during Independence Day celebrations in mid-June. A statement released by the group behind the protest expressed concern over the Philippines’ mineral resources “being positioned for global AI and supply chains controlled by foreign corporations and imperialist powers.” Watch how the conversation about critical minerals, land sovereignty, and ecological devastation develops in the Philippines—and if there are ripple effects across the region.
Modi in Jakarta: This week, Prime Minister Modi is visiting Indonesia—his first bilateral trip since the two countries elevated ties to a Comprehensive Strategic Partnership, with critical minerals and downstreaming projects explicitly on the agenda. Watch whether any agreements on critical minerals emerge from this meeting.
Stay Up to Date With ASPI
Read Farwa Aamer’s article on Washington’s opportunity to link the Quad Critical Minerals Initiative and Pax Silica.
Read Shay Wester and Brendan Kelly’s recent article for ChinaFile in which they argue that ASEAN’s balancing act is getting increasingly harder as the U.S. and China reshape Asia’s economic landscape.
Register for a July 29 webinar about China’s burgeoning auto exports with Michael Kovrig, Michael Dunne, Jorge Guajardo, and Wendy Cutler.