Trump inks critical minerals deals with Southeast Asian nations at ASEAN
US president Donald Trump has signed critical minerals agreements with Malaysia and Thailand during the Association of Southeast Asian Nations summit in Kuala Lumpur, as countries around the globe position themselves as alternatives to Chinese dominance in rare earths following Beijing’s recent export controls.
Trump and Malaysian Prime Minister Anwar Ibrahim signed a reciprocal trade agreement and a memorandum of understanding on critical minerals cooperation, while the US president signed a similar critical minerals pact with Thai Prime Minister Anutin Charnvirakul, according to the White House.
The rare earths agreements commit the United States and Malaysia, and the US and Thailand, to ‘coordinate to protect their respective domestic critical minerals and rare earths markets from non-market policies and unfair trade practices, by establishing high standard marketplaces in which those who meet those high standards can trade freely, protected by a pricing framework that includes price floors or similar measures’.
The agreements aim to challenge China’s dominance in rare earths processing and refining, not just raw material extraction.
Malaysia’s official Bernama news agency said that according to the agreement, Kuala Lumpur ‘has committed to refrain from banning or imposing quotas on exports of critical minerals or rare earth elements to the US’ and ‘to the expedient development of its critical minerals and rare earths sectors in partnership with United States companies, including granting extending operating licences to create certainty for business to increase production capacity’.
The commitment provides the United States an exception to Malaysia’s nationwide moratorium on exports of unprocessed rare earth materials that began in January 2024, which was designed to encourage companies to establish domestic processing and downstream industries.
Under the Malaysia trade agreement, Kuala Lumpur committed to adopt and implement a prohibition on the importation of goods mined, produced, or manufactured wholly or in part by forced or compulsory labour within two years of the agreement’s entry into force. Malaysia may acknowledge US government determinations on entities under Section 307 of the Tariff Act and take appropriate action to prohibit importation of goods from those companies.
Malaysia also committed to protect internationally recognised labour rights by adopting or maintaining such rights in its domestic law and practice, effectively enforcing its labour laws, and establishing appropriate legal sanctions for violations.
The agreement also commits Malaysia to explore the establishment of a mechanism to review inbound investment for national security risks, including in connection with critical minerals and critical infrastructure, and to cooperate with the United States on matters related to investment security.
The United States will work through the Export-Import Bank and the US International Development Finance Corporation to consider supporting investment financing in critical sectors in Malaysia in collaboration with US private sector partners, according to the agreement.
The Thailand critical minerals memorandum states that investment projects ‘will include provisions for technology transfer, capacity building, and training of domestic personnel’ and that ‘cooperation should prioritise development of domestic processing industries and value chains’.
The Southeast Asian agreements follow a critical minerals framework signed this month between Trump and Australian Prime Minister Anthony Albanese at the White House, under which both governments agreed to jointly invest in mining and processing projects and establish price floor mechanisms for critical minerals.
China imposed sweeping export controls on rare earth materials and processing technologies on 9 October, requiring licences for products containing more than 0.1% of Chinese-origin rare earth content. China accounts for approximately 70% of global rare earth extraction and 90% of rare earth processing capacity, according to industry estimates.
The rare earths dispute is part of a broader US-China trade and technology rivalry in which both sides have weaponised export controls and other tactics to protect strategic industries and assert dominance in global supply chains. The United States has imposed sweeping restrictions on exports of advanced semiconductors and chipmaking equipment to China, while Beijing has responded with export controls on critical minerals including gallium, germanium, and rare earths that are essential for semiconductor manufacturing, electric vehicles, and defence applications. Their actions are having a huge impact on industries from semiconductors to automobiles to renewable energy and defence equipment.
Malaysia holds an estimated 1.6 million metric tonnes of rare earth element deposits and enforced a nationwide moratorium on exports of unprocessed rare earth materials starting in January 2024. Vietnam is estimated to have up to 3.5 million tonnes of rare earth deposits, while Thailand and Myanmar hold significant reserves, according to analysis published by Bernama.
