US-ASEAN Strategic Bargaining at the ASEAN Summit: Trade Access and Critical Minerals Cooperation
At the October 2025 ASEAN Summit in Kuala Lumpur, U.S. President Donald Trump made critical minerals a central pillar of his diplomatic and economic engagement with Southeast Asia. On the sidelines of the meeting of ASEAN leaders, he signed reciprocal trade agreements with Cambodia and Malaysia, as well as framework pacts with Thailand and Vietnam. These deals include addressing tariff and non-tariff barriers for goods made in the US and commitments to deepen cooperation on critical minerals supply chains, in response to China’s dominance in processing segments of critical minerals, rare earths and other essential inputs for technology and defense industries. The deals aimed to diversify supply sources and integrate ASEAN producers into the U.S. market, with Malaysia and Thailand presented as future partners in minerals supply and trade.
While Trump’s presence at the Summit underscored Washington’s intent to redirect U.S.–ASEAN economic ties toward supply chain resilience, the agreements drew mixed reviews. On one hand, both trade and mineral components access were touted as strategic wins that could give U.S. manufacturers more reliable access to nickel, cobalt, rare earths and similar inputs. On the other hand, many of the deals and frameworks are early-stage commitments rather than legally binding agreements, leaving questions on enforcement, transshipment rules, and semiconductor-related tariffs, among others.
ASEAN Member States (AMS) responded to these deals with cautious optimism. Malaysia’s leadership, while welcoming U.S. investment and trade, insisted that enhanced ties did not preclude continued cooperation with China and other partners, noting that the upgrade to the ASEAN-China Free Trade Agreement updates was also signed in Malaysia. This balancing act reflects broader regional dynamics as ASEAN governments seek to leverage both U.S. and Chinese interest in their markets without locking themselves into exclusive alignments. At the same time, China’s role as ASEAN’s largest trade partner, ASEAN is also China’s largest trade partner, continues to shape supply chains and influence how critical minerals strategies (both commercial and geopolitical) develop across the Indo-Pacific.
Malaysia as a Powerhouse for Critical Minerals
Malaysia has positioned itself as an increasingly strategic player in critical mineral supply chains, drawing on it having one of the few rare earths processing facility in ASEAN, its large, rare-earth element (REE) deposits and growing national industrial ambition to move up the value chain from extraction toward processing and advanced manufacturing. The government has maintained policies such as a ban on the export of raw REEs to encourage domestic processing and value addition. Malaysia’s appeal as a critical minerals partner has attracted U.S. interest in joint ventures and technology collaboration, with cooperation formalized through both a Memorandum of Understanding (MOU) on Critical Minerals Cooperation and the broader trade framework, including efforts tied to the Agreement on Reciprocal Trade (ART) signed at the October 2025 ASEAN Summit. The ART itself, while not forcing exclusive mineral exports, affirmed tariff reductions and market access that bolster Malaysia’s export competitiveness, a key factor for firms considering investment in minerals and downstream industries.
Other ASEAN Players’ Critical Minerals Strategy
ASEAN is also increasingly focused on shaping a regional critical minerals strategy that boosts economic growth and captures more value from its abundant natural resources. Member states have adopted a long-term Minerals Development Vision 2045 and a 2026–2030 action plan to deepen cooperation across the upstream-to-downstream value chain, encouraging sustainable extraction, processing, and investment in technologies such as battery materials, rare earths, and copper for clean energy applications. This includes capacity building, shared data platforms, and harmonized regulatory frameworks to attract investment and strengthen supply chains, with a view to positioning the region as a competitive global hub for critical minerals while supporting its low-carbon transition and industrial development goals.
Following the summit in Kuala Lumpur, several AMS have continued to deepen economic and minerals cooperation with the United States and among each other. Thailand and Vietnam, for example, moved forward on their own respective trade and supply-chain frameworks with the U.S. that mirror Malaysia’s approach: broad reciprocal tariff reductions and supply-chain cooperation agreements that aim to diversify sources of nickel, cobalt, and rare earths outside China’s dominant processing networks. Cambodia also signed trade and minerals frameworks with the U.S., while Indonesia has recently concluded a comprehensive trade agreement with the United States, lowering tariffs significantly and including provisions to encourage U.S. investment in critical mineral and rare earth sectors. The latter of these bilateral negotiations was notably fortified by the recently finalized Agreement on Reciprocal Trade (ART) between Indonesia and the U.S., which removed many critical mineral export restrictions to the U.S., further strengthening and diversifying supply chain cooperation. These developments are seen as part of a broader U.S. strategy to anchor ASEAN’s industrial leaders in resilient supply chains and reduce over-dependence on China.
The Philippines has emerged as a key player in this evolving landscape, especially in critical minerals development. In early February 2026, Manila signed an MOU with the United States aimed at developing its domestic critical minerals and rare earths sector and moving beyond simply exporting raw ores. This pact is part of a wider U.S.-led effort to buildmore resilient, diversified supply chains by fostering value-added processing capacity in ASEAN countries. Industry and government officials in the Philippines described the deal as opening the door to technology transfer, foreign direct investment, and a shift toward a processing hub for minerals used in electric vehicles (EV), renewable energy, and advanced manufacturing. While the Philippines has not yet formally joined any proposed U.S.-led preferential trade bloc for critical minerals, the framework lays groundwork for potential future participation and enhances its role in the global supply networks. Manila has also deepened collaboration with Indonesia to boost the nickel value chain, underscoring Southeast Asia’s collective leverage in battery metals and broader minerals markets.
Together, these developments illustrate how ASEAN countries are translating the momentum from the 2025 ASEAN Leaders’ Summit into concrete action, balancing trade and investment interests among the United States, China, and other major powers, while pushing to build higher-value mineral industries at home.
U.S. Overall Dependence on ASEAN’s Critical Minerals
The United States remains structurally dependent on imports for a large share of its critical minerals, especially for those vital to clean energy, semiconductors, and defense technologies, including rare earth elements, nickel, and cobalt, with much of its supply historically tied to China and other global producers. According to recent analyses, the U.S. is 100% import-dependent for many critical minerals and over 50% dependent on imports for dozens more, underscoring persistent vulnerabilities in domestic supply chains. This reliance has driven Washington to diversify sources through bilateral agreements with ASEAN partners, investor-friendly trade frameworks like those discussed at the ASEAN Summit (e.g., reciprocal trade agreements and critical mineral MOUs) and broader multilateral initiatives such as the U.S.-led Pax Silica supply-chain coordination effort to reduce perceived overdependence on any single supplier.
At the February 2026 U.S. Critical Minerals Ministerial in Washington, the U.S. government used the gathering of over 50 countries to advance a strategic agenda linking critical-mineral cooperation to economic security and supply-chain diversification. U.S. officials underscored efforts to reduce reliance on dominant suppliers like China by promoting new frameworks, bilateral agreements, and multilateral cooperation on mining, processing, and value-chain integration for key materials such as rare earths and battery metals.
One concrete outcome tied to the ASEAN context was the Philippines–U.S. Memorandum of Understanding on developing the Philippines’ critical minerals and rare-earths sector, aimed at shifting production toward domestic processing and higher-value activities rather than raw-ore exports. The broader U.S. strategy discussed at the ministerial included proposals for a preferential trade zone made up of an OPEC like buyers group of nations, for critical minerals with coordinated price floors and deeper diplomatic, investment, and regulatory alignment with partner countries to strengthen trusted supply chains in the Indo-Pacific and beyond, not the least of which including ASEAN.
For U.S. companies, deeper engagement with ASEAN on critical minerals has opened new upstream and downstream market opportunities. Frameworks and deals forged since late 2025 have expanded tariff-reducing access to materials and allowed American firms to participate in mineral exploration, refining, and processing projects across the region. These arrangements are complemented by U.S. government support programs (e.g., U.S. Trade and Development Agency (USTDA)’s critical minerals project scoping and funding initiatives) that help U.S. firms invest in emerging projects abroad, strengthen commercial ties, and build competitive advantages in electric vehicle batteries, rare earth-based components, and high-tech supply chains.
At the same time, ASEAN economies are reaping economic and strategic benefits from this shift. Countries such as Indonesia, Malaysia, the Philippines, Thailand, and Vietnam have vast nickel, cobalt, and rare earth resources and are increasingly attracting foreign direct investment, technology transfer, and manufacturing capacity tied to critical minerals and associated industries. ASEAN’s role as a global production hub for chips, EV components, and metals has been reinforced, with U.S. trade and investment helping diversify export markets, create jobs, and support local processing infrastructure, all while fostering resilience to supply shocks and reducing the region’s reliance on any single external market.
In summary, U.S.-ASEAN critical mineral cooperation has increasingly moved from diplomatic statements to actionable economic integration, catalyzing investment and development across Southeast Asia. This evolving partnership reflects both sides’ interest in robust, diversified supply chains and mutual economic gains, even as global competition continues to influence policy choices and commercial strategies.
