By Bryanna Entwistle and Shay Wester
Editor’s Introduction: Hi there. This week’s Asia Policy Brief covers President Trump’s first stop on his second administration’s Asia tour: the ASEAN Leaders’ Summit in Kuala Lumpur. On the sidelines, he presided over the signing of a number of deals, including a ceasefire deal between Thailand and Cambodia, and “reciprocal trade” deals with Malaysia and Cambodia, respectively. ASPI’s Press and Program Officer Bryanna Entwistle and Director of Asian Economic Affairs Shay Wester offer their analysis on what happened and what to watch for next.
State of Affairs: Trump’s Whirlwind Visit to Kuala Lumpur
The attendance of an American head of state at the annual leaders meeting of the Association of Southeast Asian Nations (ASEAN) has long been considered a litmus test for the significance of the region to Washington’s foreign policy agenda. Over the past eight years, U.S. Presidents have only participated in two ASEAN meetings—President Trump traveled to the region in 2017 during his first term, and former President Biden called in virtually in 2022. Given that Southeast Asia faces some of the highest tariff rates globally and transshipment penalties that could disproportionately affect the region, Trump’s announcement that he would attend the 2025 leaders’ meeting in Kuala Lumpur came as somewhat of a surprise.
At this year’s summit, Trump attended the signing of the Thailand-Cambodia ceasefire deal, the U.S.-ASEAN Summit, and several meetings that involved signing trade agreements with Malaysia and Cambodia and framework agreements with Vietnam and Thailand. Moreover, critical minerals agreements were signed with Malaysia and Thailand to expand processing capacity, strengthen supply chains, and promote partnerships with U.S. companies. Despite the showmanship and flattery from several Southeast Asian leaders, there is much more work to be done on many of the agreements that Trump signed in Malaysia, and these countries will still be subject to tariffs going forward. The protests against Trump across Kuala Lumpur underscored that things are far from stabilized in U.S.-Southeast Asia relations—and it will take more than one visit to reverse course.
Why It Matters: What’s in a Deal?
Thai-Cambodia Ceasefire Deal
When a longstanding border conflict between Thailand and Cambodia turned deadly in May, it became an enormous test of ASEAN’s ability to mediate between member states and fulfill its mandate of preventing conflict within the bloc. Diplomatic maneuvering by ASEAN Chair Malaysia, in addition to President Trump’s threats to suspend tariff negotiations, convinced Cambodian and Thai leaders to agree to an initial ceasefire in July. Malaysia then oversaw negotiations for the enhanced ceasefire that was signed at the ASEAN Summit, dubbed the “Kuala Lumpur Accords.”
President Trump has claimed full credit for driving the ceasefire deal, and his decision to stop in Malaysia was driven by a desire to preside over the signing ceremony—another photo opportunity for his Nobel Peace Prize campaign. The White House reportedly told summit organizers that Trump did not want Chinese officials in attendance at the ceremony, despite China’s documented role in facilitating early ceasefire negotiations. While pressure from Washington undoubtedly helped bring Thailand and Cambodia to the negotiating table, Trump’s attempts to take credit for the agreement undermine ASEAN’s historic accomplishment of ending a conflict between two of its member states. Furthermore, the expanded ceasefire is far the all-encompassing peace deal that Trump claims it is, as it fails to address the historic root causes of the border dispute. Thailand’s own foreign minister refused to refer to the joint declaration as a peace agreement, calling it a “pathway to peace” instead.
Rapprochement with Cambodia?
Cambodian leadership was much more enthusiastic about Trump’s involvement at the signing ceremony, and the agreement may have even cleared the way for rapprochement between Washington and Phnom Penh, which has increasingly drifted into Beijing’s orbit. In the first leader-to-leader meeting since Prime Minister Hun Manet assumed office 2023, President Trump agreed to remove an arms embargo on Cambodia that has been in place since 2021 and to restart the bilateral Angkor Sentinel Defense exercise, which was last held in 2017. In return, Hun Manet signed an agreement to “expand cooperation” on combatting Cambodia-based scam centers, an extension of recent U.S. Treasury efforts to crack down on cybercrime targeting American citizens. However, the Cambodian government’s deep ties to the industry makes real progress questionable. (For background on the cyber-scam industry, see ASPI’s most recent Asia Inside Out podcast episode).
A U.S.-Malaysia Upgrade
Another diplomatic achievement was the elevation of the U.S.-Malaysia relationship to a comprehensive strategic partnership, marking the first upgrade in ties between the two countries since 2014. In addition to the trade agreement, it involves enhanced cooperation on maritime security, new critical minerals partnerships, and greater transparency on foreign exchange interventions.
All Eyes on Trade
Beyond the security and diplomatic maneuvering, Trump’s visit focused on advancing his tariff-driven trade agenda through bilateral deals with Southeast Asia. This included two “reciprocal trade” agreements (Malaysia, Cambodia) and two frameworks (Thailand, Vietnam) built on a common template: Washington keeps high baseline tariffs (19-20%) while carving out certain products for lower or zero rates, while partners slash duties, remove a range of non-tariff barriers, accept U.S. standards, and agree to purchases of U.S. products and pledge further investments in the U.S. However, carve-outs for specific products do not shield them from future Section 232 or 301 actions, only noting that the United States may take these new deals into account.
Malaysia’s agreement goes the furthest: providing greater market access across automotives, agriculture, and manufacturing, while embedding forward-leaning digital rules. The agreement bundles headline purchase pledges of $150 billion over five years for semiconductors, aviation, and data center equipment, and a $70 billion U.S. investment commitment by Malaysia. On the other hand, Cambodia’s deal is a bit softer, reflecting its Least Developed Country status, but includes many similar provisions. Both agreements pledge closer alignment with U.S. export controls and sanctions, tighter screening of sensitive investments, and cooperation to police rules of origin, content, and transshipment to deter duty evasion. These provisions clearly target China and risk provoking retaliation. Neither agreement provides a dispute settlement mechanism, while giving Washington the ability to reimpose tariffs without consultation and leaving unresolved transshipment and foreign content questions that could still trigger tariffs of 40%.
President Trump also signed critical minerals MOUs with Malaysia and Thailand aimed at deepening cooperation, accelerating development, and diversifying supply chains away from Chinese dominance. Malaysia also committed to refrain from restricting exports of critical minerals and rare earth magnets to the U.S. These steps build on the U.S.-Australia Critical Minerals Framework announced one week earlier, which aims to scale mining and processing through targeted financing and market-stabilization tools.
As Prime Minister Anwar acknowledged in his plenary remarks, “growing geoeconomic fragmentation” is forcing ASEAN to diversify its economic strategy even as it negotiates with the U.S. ASEAN’s two-track response to U.S. tariffs includes pursuing individual accommodations with Washington (as reflected in these bilateral deals) while accelerating regional integration and diversifying trading partners. In Kuala Lumpur, the bloc completed an upgrade to the ASEAN Trade in Goods Agreement, reached substantial conclusion of the Digital Economy Framework Agreement (DEFA), signed the ASEAN-China Free Trade 3.0 agreement, and convened a meeting of Regional Comprehensive Economic Partnership (RCEP) leaders. Prior to the summit, the new ASEAN Geoeconomics Task Force also issued its first report, the bloc’s most coordinated response yet to geoeconomic fragmentation.
What to Watch: Will the Momentum Last?
Implementation Over Announcements: The test of Trump’s Southeast Asia deals lies in execution. Watch whether Malaysia secures preferential treatment on semiconductors when the Section 232 review concludes, and how countries are treated by future U.S. rules of origin to deal with third country shipments. In addition, how economic security commitments are implemented will reveal whether these are substantive obligations. For Malaysia and Cambodia, do agreements move quickly to implementation or get bogged down in domestic procedures? For Thailand and Vietnam, do frameworks lead to binding agreements?
The Missing Deals: Indonesia, Vietnam, Thailand, and the Philippines remain without bilateral trade agreements despite being major U.S. trading partners in Southeast Asia and previously announcing deals with the Washington. Vietnam and Thailand’s framework announcements suggests movement, but Indonesia and the Philippines’ absence is conspicuous. Southeast Asian countries will face pressure to cut similar deals quickly, as those without agreements risk being at a competitive disadvantage with Malaysia and Cambodia.
ASEAN Cooperation Going Forward: The 47th ASEAN Summit marked watershed moments beyond Trump’s visit. Timor-Leste’s admission as the 11th member completes ASEAN’s geographic footprint, while peace in Myanmar remains elusive and a challenge to the bloc’s unity. With the Philippines set to chair ASEAN in 2026 under the theme ‘Navigating Our Future, Together,’ expect a focus on implementing ASEAN Vision 2045, integrating Timor-Leste, and pushing for measurable progress on a South China Sea Code of Conduct, all while navigating the pressures that tested Malaysia leadership this year.
Dive Deeper With ASPI
Rorry Daniels speaks with transnational cybercrime expert Jacob Sims on the “Political Economy of Cybercrime in Southeast Asia” in our latest podcast episode of Asia Inside Out.
In July, an expert panel, moderated by Bryanna Entwistle, unpacked the roots of the Thai-Cambodia border conflict and discussed what was needed in a long term peace agreement.
For a deeper look at how ASEAN is navigating the pressures of China’s export surge and intensifying Western de-risking, read Shay Wester and Brandan Kelly’s report, “ASEAN Caught Between China’s Export Surge and Global De-Risking.”