Hi all,

There has been a flurry of trade activity over the weekend, including announcements on new trade agreements and updates on China, Canada, and Brazil. Here are the highlights.

New Trade Agreements and Trade Agreement Frameworks

Yesterday, the White House announced trade agreements with Malaysia and Cambodia, and frameworks for trade agreements with Vietnam and Thailand.

Cambodia agreed to eliminate all its tariffs on U.S. goods in exchange for a 19% reciprocal tariff rate. The United States agreed to lower its tariffs to MFN rates on several tariff lines, including on aerospace, generic pharmaceuticals, and unavailable natural resources. Cambodia also committed to addressing a range of non-tariff barriers, which are listed in Annex III. There are no commitments on Section 232 tariffs. However, the Joint Statement states the United States “may positively consider” the effect of this agreement has on national security in considering action under Section 232. Cambodia also agreed to purchase ten, with the purchase right for an additional ten, Boeing 737 MAX 8 aircraft by October 31, 2025.

Malaysia agreed to eliminate “substantial” tariffs across industrial goods exports, including machinery and electrical equipment, metals, passenger vehicles, and several agricultural exports, in exchange for a 19% reciprocal tariff rate. Similar to the Cambodia agreement, the United States will reduce tariffs on aerospace, generic pharmaceuticals, and unavailable natural resources. Malaysia committed to addressing a range of non-tariff barriers related to agriculture, manufacturing, and digital trade. Also similar to Cambodia, there are no commitments on Section 232 tariffs. However, the Joint Statement states the United States “may positively consider” the effect of this agreement has on national security in considering action under Section 232. Malaysia did not make specific purchasing commitments, but Annex IV and Appendix I note several hundred billion in “forthcoming commercial deals.” Malaysia also agreed to not impose any restrictions on the exportation of rare earth magnets.

Here are additional notes on the Cambodia and Malaysia agreements:

The Malaysia agreement will enter into force 60 days after the date on which the countries have exchanged written notifications certifying completion of their applicable legal procedures or “on such other date as the Parties may agree.” The Cambodia agreement will enter into force after the countries notify each other of the completion of “internal procedures required for entry into force” of the agreement.
On rules of origin, the agreements state that the parties “intend for the benefits of this Agreement to accrue substantially to them and their nationals” and that if said benefits are accruing “substantially to third countries or third-country nationals,” a party may establish specific rules of origin.
The agreements include a provision to address “unfair practices of companies owned or controlled by third countries” operating in their jurisdictions, arguably targeting China-owned firms in those markets.
The agreements do not include an enforcement provision, so any violations would be self-judging by the parties.
The agreements include commitments that are similar to those included in traditional trade agreements, including on labor, environment, intellectual property, and other areas.

For Vietnam and Thailand, the White House released framework agreements and actual trade agreements will be negotiated in the future. The Joint Statement on the Vietnam framework states Vietnam will agree to provide preferential market access for “substantially all U.S. industrial and agricultural exports” in exchange for a 20% reciprocal tariff and cuts to specific products set out in Annex III to Executive Order 14346 (which covers unavailable natural resources, pharmaceuticals, and aircraft). Vietnam will also purchase 50 Boeing aircraft. Thailand will agree to “eliminate tariff barriers on approximately 99 percent of goods” on U.S. industrial and agricultural products in exchange for a 19% reciprocal tariff and cuts to specific products set out in Annex III to Executive Order 14346. Thailand Joint Statement also notes commercial deals and purchases of U.S. agricultural goods, energy products, and aircraft. The joint statements notes that the parties will negotiate and finalize the respective agreement in the coming weeks, so we will keep you updated.

United States – China Trade Relations

It is also being reported that the United States and China have reached a framework for a trade agreement to present to President Trump and President Xi for final approval in advance of their meeting on Thursday, October 30. Although no official documents have been released, this likely means that we will not see tariff hikes on China starting November 1 and that a trade announcement would likely involve a deferral on rare earth export controls and soybean purchases. Notably, Treasury Secretary Bessent confirmed that President Trump will travel to Beijing early next year and that President Xi would visit the United States in advance of the G20 Summit, which the United States is hosting in 2026. Bessent also confirmed that the leaders would be discussing fentanyl, and the MOFCOM readout included discussions on “US Section 301 measures on China's maritime, logistics and shipbuilding sectors.”

On NBC’s Meet the Press, Bessent expressed optimism that the tariff increase would not go into effect on imports from China, saying negotiators had reached a “very substantial framework that will avoid that and allow us to discuss many other things with the Chinese.”

“I think we will be able to discuss them helping us get this terrible fentanyl crisis under control; I think we are going to be able to discuss substantial soybean and ag purchases for our American farmers; I think we are going to be able to discuss more balanced trade,” Bessent continued, adding, “I'm not going to get ahead of the two leaders, but I think that they will also be discussing President Trump's global peace plan that he's been so ... successful at both here in Asia, the Middle East, and now he's looking to Ukraine, Russia.”

U.S. Trade Representative (USTR) Jamieson Greer said “we are moving forward to the final details of the type of agreement that the leaders can review and decide if they want to conclude together.”

United States – Canada Trade Relations

Lastly, President Trump wrote on social media Saturday night that he would increase tariffs on Canada by 10% for running an advertisement that includes a clip of former U.S. president Ronald Reagan speaking against tariffs. We are monitoring official government sources for any implementing documents.

United States – Brazil Trade Relations

Yesterday, President Trump and President Lula met on the margins of the ASEAN summit in Malaysia, where the two leaders reportedly agreed to negotiating tariff reductions “immediately.” Following the meeting, Brazil’s Foreign Minister said the two sides will “establish a negotiation schedule and establish the sectors we will talk about so that we can move forward." Minister Vieira also said that Brazil had requested that tariffs be suspended during the negotiation process, but it is unclear if that has been agreed to. U.S. and Brazilian negotiators will meet on Monday morning to discuss details.

Please reach out with any questions.

Best,

Sung Chang
Vice President, International Trade

Ellen Jackson
Director, Government Affairs

This mailing was sent to RILA's International Trade & Customs Committee

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