US agrees deals with Indonesia, Philippines – but are Chinese firms a step ahead?

The United States has struck new trade deals with Indonesia and the Philippines, in a move analysts say could indirectly undercut China by reshaping regional supply chains and tapping rare earth reserves – even if Beijing is not explicitly targeted.

Still, some analysts warn that efforts to counter China may deliver less than intended results, as Chinese firms are already adapting by localising operations across Southeast Asia.

“Having failed to secure direct wins against China on tariffs and export controls, [the US] has a stronger incentive to contain China in a more indirect manner, and the deals with Southeast Asian countries are examples of that tactic,” said Xu Tianchen, senior China economist at the Economist Intelligence Unit.

But Chinese factories are not as reliant on transshipments as they were five years ago, as they increasingly seek to localise production in Southeast Asian countries, he added.

US President Donald Trump said on Tuesday that he had reached trade agreements with the Philippines and Indonesia.

According to Trump, imports from the two countries will be charged a 19 per cent tariff, while American shipments to the Philippines and Indonesia will not face any duties.