Trump's Asia Tour: Historic Peace Deal between Thailand and Cambodia, and Trade Challenges with China

Thai Prime Minister Anutin Charnvirakul and Cambodian Prime Minister Hun Manet signed a joint "peace agreement," supervised by US President Donald Trump. Before the signing, the Cambodian Prime Minister thanked Trump for his "decisive leadership," stressing that differences must be resolved by peaceful means.

The process of weapons withdrawal and the release of prisoners of war will begin "immediately," according to the Thai Prime Minister. Trump clarified that his administration will use US trade agreements as a key diplomatic pressure tool on the two nations to achieve peace, stating: "We make many deals with both countries as long as they live in peace."

Trump arrives in Asia for an intensive tour that includes the ASEAN summit in Kuala Lumpur, followed by Japan and South Korea for the anticipated meeting with his Chinese counterpart Xi Jinping, where trade is at the top of the agenda.

Trade, Gains, and Risks: China is the Key

The primary focus of Trump's tour will be concluding new trade agreements that offer opportunities for American companies while maintaining the flow of tariff revenues to the US Treasury. China remains the key to success.

Regarding China: Trump seeks to persuade Beijing to resume purchasing US agricultural exports, ease restrictions on rare earth metals exports, and expand market access for US companies. Xi Jinping, in turn, aims to appear as the stronger negotiator, using rare earth metals (essential for semiconductors and weapons) as a pressure card. Analyses indicate that the harsh tariffs imposed are unsustainable for both countries.

Regarding Japan: Trump aims to conclude a final tariff agreement (reducing tariffs on Japanese cars to 15%), pressure Tokyo to increase funding for the deployment of US forces (53,000 troops), and increase Japan's purchases of US agricultural products (rice). The new Prime Minister Sanae Takaichi has pledged to increase the defense budget and invest $550 billion in the United States to strengthen supply chains.

Regarding South Korea: The mission of South Korean President Lee Jae-myung focuses on reducing US tariffs on Korean exports (from 25% to 15%). However, negotiations stalled due to Trump's insistence that Seoul invest $350 billion upfront in the United States. The trade issue was temporarily overshadowed by speculation of a meeting between Trump and Kim Jong Un.

Southeast Asian Nations: These countries are considered the most affected by the trade war between Washington and Beijing, as they are a crucial part of the electronic supply chains. Their leaders are looking to secure "ink on paper" (final agreements) to get relief from the tariffs ranging from 10 to 40 percent.