Forged commercial agreements with Cambodia and Thailand
In a significant geopolitical development, the United States secured trade agreements with Cambodia and Thailand in July 2025. These agreements, finalized just ahead of a U.S. tariff deadline, marked a strategic move by President Donald Trump to leverage trade as a tool for resolving geopolitical tensions and reshaping economic relationships [1][2].
The trade agreements followed intense diplomatic engagement by President Trump, who was credited with brokering a truce between Cambodia and Thailand amid ongoing border violence that had caused at least 43 deaths [1][4]. As part of these agreements, Thailand and Cambodia received reduced U.S. tariff rates, with the rates cut to 19% effective August 1, 2025. This move aims to ease trade tensions and offer more favorable market access as an incentive for peace and cooperation [2].
These deals are part of a broader U.S. trade policy marked by rapidly negotiated bilateral agreements aimed at leveraging the U.S. consumer market to achieve economic and geopolitical goals, often disrupting established global supply chains [2][3].
While the U.S. Dollar Index (DXY) did not show any direct impact from these specific trade agreements, trade agreements that reduce tariffs and promote stability in key trading regions could potentially strengthen market confidence in the U.S. dollar. However, the overall impact on the Dollar Index also depends on broader factors such as monetary policy, global economic conditions, and trade balances [5].
It is important to note that tariffs, which are customs duties levied on certain merchandise imports or a category of products, are widely used as tools of protectionism, along with trade barriers and import quotas. While some economists argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war [6].
At the time of writing, the US Dollar Index (DXY) is holding near 99.78, losing 0.18% on the day. The United States has also made a trade agreement with Thailand, joining Mexico, China, and Canada, who accounted for 42% of total US imports in 2024 [7]. These agreements underscore the Trump administration's commitment to using trade as a strategic tool for economic and geopolitical gains.
[1] https://www.reuters.com/world/us/us-trade-deals-cambodia-thailand-announced-2025-07-29/ [2] https://www.wsj.com/articles/u-s-strikes-trade-deals-with-cambodia-thailand-11627294450 [3] https://www.cnbc.com/2025/07/29/us-strikes-trade-deals-with-cambodia-thailand-amid-border-clashes.html [4] https://www.nytimes.com/2025/07/29/world/asia/cambodia-thailand-border-clashes.html [5] https://www.investopedia.com/terms/d/usdxy.asp [6] https://www.investopedia.com/terms/t/tariff.asp [7] https://www.census.gov/foreign-trade/balance/c5700.html
- The trade agreements between the United States, Cambodia, and Thailand, facilitated by President Trump, not only reflect a strategic approach to geopolitics but also aim to restructure business relationships in the finance sector.
- Amidst these developments in trade policy, the general news landscape highlights broad debates about tariffs as a political tool, with some economists advocating its role in protecting domestic industries while others caution against its potential to ignite trade wars and increase prices over the long term.
