Executive Summary

The Asia-Pacific region demonstrates continued U.S. strategic influence through major economic and defense initiatives, even as narratives of American de-hegemony persist. Washington has secured critical minerals partnerships with Australia ($8.4B investment) and Japan, directly challenging China's 90% control of rare earth processing. These agreements strengthen supply chain resilience while reinforcing security cooperation through AUKUS and bilateral defense frameworks.

Economic dynamics show cautious improvement, with China announcing tariff reductions on U.S. agricultural goods following October leadership meetings, while Southeast Asian nations—including Indonesia and Malaysia—actively pursue zero-tariff agreements with Washington. However, China simultaneously deepens partnerships with Russia and North Korea, rebuilding border infrastructure and expanding economic cooperation despite international sanctions.

The security environment remains volatile with elevated terrorism alerts in South Korea, persistent Thailand-Cambodia border tensions, North Korean missile demonstrations, and Taiwan's internal political divisions over cross-strait engagement. Over the next 90-120 days, U.S.-China economic relations are expected to continue easing while security engagement intensifies, particularly involving South Korea, Taiwan, and the Philippines. Regional stability depends on balancing great-power competition with ASEAN-led diplomatic frameworks and sustained monitoring of rapidly evolving developments.