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Asian economies made substantive progress in trade negotiations with the United States at both the ASEAN and APEC Summits in late October. In addition, details of the China and the US framework agreement are becoming clearer.
These deals, in ANZ Research’s view, will provide short-term relief to tariff shocks.
Asian exports have been solid this year despite the tariff threat. Shipments of electronic products from mainland China and Taiwan are robust. However, the performance of non-electronic exports is less robust.
Integrating into technology supply chains is the best policy to mitigate tariff shocks as the products are less price sensitive.
Economy & US tariff
Latest progress
Mainland China: effective tariff estimate ~33%
An agreement was reached in early November. The deal will bring down the tariff rate broadly. The fentanyl tariff will be reduced to 10 per cent from 20 per cent. The US will extend the tariff truce of 24 per cent.
Indonesia: 19%
Negotiations are nearing completion following the signing of a framework for a reciprocal trade agreement on July 22.
This deal will eliminate about 99 per cent of tariffs on US industrial and agricultural goods, while the US will apply a 19 per cent reciprocal tariff on Indonesian exports – with possible exemptions for certain commodities such as palm oil, cocoa and chocolate
Malaysia: 19%
The US announced a finalised Agreement on Reciprocal Trade with Malaysia on October 26, maintaining the 19 per cent tariff on most goods but exempting select items such as palm oil, rubber, cocoa, aircraft parts and pharmaceuticals.
The US has also offered favourable consideration for Malaysian semiconductor exports. In return, Malaysia agreed to ease non-tariff barriers, align technical standards and guarantee unrestricted supply of critical minerals and rare earth elements to the US.
Philippines: 19%
Negotiations are underway between the Philippines and the US, with officials citing “comprehensive issues” that require resolution.
Key areas include trade rules and regulations; non-tariff measures covering services and investments; and protection for sensitive products such as rice, sugar and poultry. The Philippines is seeking terms that safeguard its domestic industries.
Singapore: 10%
Singapore’s talks with the US are focused on semiconductor sectoral tariffs, which are at a very early stage.
Given the 10 per cent baseline tariff rate will not be reduced and Singapore already has a free trade agreement with the US, the country is not pursuing broader trade talks.
South Korea: 15%
A breakthrough has been reached, with formal documentation imminent. The agreement will see South Korea invest $US350 billion into the US, while the US will cut tariffs on Korean autos from 25 per cent to 15 per cent and keep the 15 per cent reciprocal tariff rate.
South Korea also secured competitive guarantees for its key industries, ensuring any tariffs on South Korean semiconductors will not be set at a disadvantage compared to Taiwan, and South Korean pharmaceutical and wood products will receive most-favoured-nation treatment.
Taiwan: 20%
Negotiations have been underway for a few months, but there has been no official announcement from either side. Reportedly, the US has asked Taiwan to produce 50 per cent of chips in the US.
Thailand: 19%
Both parties are negotiating rules of origin and other issues after signing a framework on October 26, aiming to finalise the agreement by year-end.
The deal will remove tariffs on about 99 per cent of US industrial and agricultural goods, while the US will apply a 19 per cent tariff on Thai products, with possible zero-tariff adjustments for selected items.
Vietnam: 20%
Vietnam and the US issued a joint statement on October 26, explaining the key terms of the trade deal framework between the two economies. Vietnam will grant preferential market access to US goods, while the US will continue to impose 20 per cent reciprocal tariff on imports from Vietnam.
Further negotiations will be held for some products whose tariffs can be reduced to zero. Vietnam will address barriers to entry for US-made motor vehicles, pharmaceutical products and medical devices. It will also buy US agricultural commodities and aircrafts. A deal may be finalised within the next few weeks.
Source: Bloomberg, ANZ Research
Expedited
US President Donald Trump’s Asia tour has expedited the progress of trade negotiations in the region. Four economies have finalised or made substantive advancements in deals with the US at October’s ASEAN Summit.
The APEC Summit in South Korea provided a major forum for bilateral trade negotiation, with the host finalising an agreement with the US.
Based on the progress of negotiation and the announcements, the outcomes can be roughly divided into four buckets.
The first is the target market cuts tariffs, and the US maintains tariffs. Malaysia and Cambodia agreed to drop tariff barriers on US goods. Thailand pledged to eliminate tariffs on 99 per cent of products.
The US will maintain headline tariff rates of 19 to 20 per cent on these countries and offer selective reductions via product exemption. For example, Malaysia secured exemptions on palm oil, cocoa, rubber and pharmaceuticals, representing 22 per cent of its exports to the US.
The second outcome is the US gets access to the target market and resources. Thailand and Vietnam agreed to address non-tariff barriers against US medical services and pharmaceutical products. The US signed deals with Thailand and Malaysia on rare earths and critical minerals.
The next is the target market purchasing US goods and services: Thailand and Vietnam will procure more agricultural products, energy and aircraft from the US. Malaysia will purchase semiconductors, aerospace components and data centre equipment with an estimated value of $US150 billion.
The final is the target market committing to increased investment in the US. South Korea committed to an investment of $US350 billion in the US. Likewise, the proposals for Taiwan to produce more chips in the US will require an increase in direct investment in the US.
Balance
ASEAN economies are navigating a delicate balance between the US’ demands and their economic ties with China. The trade balance of Asia ex-China has increased fourfold in the last decade but, the region has turned from trade surplus to trade deficit in the last few years.
While this partly reflects the increased penetration of Chinese goods, the figure also includes the shift in supply chains, through which some economies import more parts and inputs from China. Therefore, the China deficit is an input to the surplus with the US.
Despite the tariff threat, Asian exports to the US have remained strong. Earlier, there was a fear exports in the second half of calendar 2025 will drop following the frontloading effect. But the figures in the last few months do not reveal any adjustment.
Excluding mainland China, Asia’s electronic exports have outperformed, with Taiwan’s exports especially strong. This is consistent with ANZ Research’s view that economies with greater product complexity will be less vulnerable to tariff threats, as the products are less price sensitive.
Raymond Yeung is Chief Economist, Greater China at ANZ
This story is an edited version of the ANZ Research report “Asia Macro Weekly: Asia-US trade agreements – an update”, published October 31, 2025.
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US, Asia trade deals: a snapshot
2025-11-18
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