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

SCMP | July 23, 2025, 9 p.m. | Original

US President Donald Trump meets with Philippine President Ferdinand Marcos Jnr in the Oval Office at the White House in Washington, on July 22. Photo: TNS

in Beijing and in Hong Kong

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.

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.

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