The Trump administration is carrying out a major shift in U.S. policy toward Myanmar.

After the 2021 coup , the administration of former President Joe Biden demanded a return to democracy and sanctioned the military junta. Now, however, Washington is reportedly holding direct talks with the very people it accused of genocide in 2022.

Trump had already given Gen. Min Aung Hlaing implicit recognition when he sent him a tariff letter in July 2025. Two weeks later, the U.S. Treasury removed several of his cronies from its sanctions list . In June this year, officials from both countries met in Tokyo . But the most significant step came in mid-September, when Assistant Secretary of State for Intelligence and Research Michael Vance opened direct talks with Min Aung Hlaing in Naypyidaw, Myanmar’s capital, marking the highest-level U.S. contact since the coup.

The stated goals of U.S. reengagement are narrow: securing the release of U.S. businessman Adam Castillo, a former head of the American Chamber of Commerce in Myanmar, and enlisting the regime’s cooperation in shutting down the online scam centers operating in the country. U.S. officials also had their eyes on Myanmar's rare earth deposits , a market currently controlled by China.

The first goal has been achieved. On the second, the regime is part of the problem, and the third lies in territory it does not control. So is Trump betting on a partner that cannot deliver?

A bogged-down war

The current phase of the war began in mid-2021 when the crackdown on anti-coup protests pushed thousands of activists into the countryside where minority insurgencies had been operating for decades. Alongside the armed resistance, ousted lawmakers from the National League for Democracy , the ruling party prior to the coup, creating the National Unity Government (NUG). While some militant groups joined the NUG, others remained independent. The result is a conflict fragmented both politically and geographically, whose actors pursue different goals, shift alliances and tactics, and are tied to different foreign powers.

Over the following four years, the military lost control of much of the country to the NUG and ethnic armed organizations while keeping its grip on the main levers of the economy, such as ports, factories and offshore gas. But it lost access to most rare earth deposits, which are now held by minority groups like the Wa, Karens and Shan.

The Biden administration responded with targeted sanctions on the junta’s leaders and its business conglomerates, and supported pro-democracy groups through humanitarian and non-lethal aid, much of it channeled across the Thai border. There were never any weapons transfers or formal recognition of the NUG as a legitimate interlocutor.

Aid from the United States and Europe, said Khun Alynn, Deputy Head of Department of Home Affairs, Interim Executive Council of Karenni State (IEC), “came through humanitarian organizations, but also through third countries that I can’t confirm.”

Then, in 2025, the incoming Trump administration dismantled USAID, just as the military launched a counteroffensive and began retaking territory with new tactics and drones supplied by Russia and China.

“The [USAID] cuts had a huge impact. Medical supplies are already running short, and we can’t deal with the malaria and tuberculosis outbreaks in the area. At least two hospitals are going to close by the end of the year,” Paung, a 35-year-old doctor and director of the Luke Foundation , told Responsible Statecraft.

Five years of war have taken a staggering toll: according to the UN, more than 3.7 million people are internally displaced, and violence monitor ACLED has recorded 100,114 conflict-related deaths. In Karenni, Maw Re Ree, deputy head of the IEC's humanitarian department, works in the region's roughly 500 displacement camps. "We systematically receive threats of bombing," she said.

Sovereignty problems

The junta retains formal sovereignty but controls only about 21% of Myanmar’s territory; resistance forces hold some 42% , and the rest is contested. To consolidate his position, in January 2026, Min Aung Hlaing held an election in only those parts of the country that were under his control and was sworn in as president of a nominally civilian government in a ceremony attended by representatives of China, India and Thailand, along with 20 other countries, last April. Western governments dismissed the vote as a sham, while Washington stayed silent.

That silence has left the opposition uneasy, especially in light of the administration’s recent moves. “The military regime may also seek to use engagement with the United States to overcome its crisis of political legitimacy,” Zin Mar Aung, the NUG’s foreign minister, told Responsible Statecraft.

Washington’s priority appears to be curbing the financial losses and the harm to Americans caused by online scams and drug trafficking. The scam compounds, located near the Thai border, are run by criminal syndicates and protected by junta-allied militias, such as the Border Guard Forces, which receive financial kickbacks from the scammers. Given this relationship and the power of the criminal syndicates, the regime “cannot fully guarantee” an end to these practices, Zin Mar Aung noted.

Rare earths, meanwhile, are “entirely off-limits to Naypyidaw,” said David Gum Awng, the NUG’s deputy foreign minister, referring to Myanmar’s capital.

Indeed, in late 2024, the Kachin Independence Army (KIA) seized the heart of one of the world's most valuable concentrations of heavy rare earths, and it taxes the trade with China to fund its fight. Further east, in territory controlled by the United Wa State Army (UWSA), which has remained neutral in the ongoing civil war, Chinese companies are mining rare earths, also without Naypyidaw's approval.

The options floated in Washington have ranged from dealing with the military authorities to brokering talks between them and the KIA, to engaging the KIA directly and possibly partnering with India to process the minerals. Each of those paths runs through Naypyidaw or bypasses the opposition coalition, which narrows the resistance’s room for maneuver without forcing an open break.

“So we're taking it very cautiously, but we also understand the very pragmatic nature of the world order that we live in,”said David Gum Awng, who noted that the NUG still maintains some contact with Washington.

The cost of the bet

For Napas Thein, a research fellow at the University of Toronto’s Myanmar Policy and Community Knowledge Hub, engaging the junta would cost Washington “credibility regarding democracy and human rights” and draw it into a highly unstable landscape. It would also strain U.S. ties with the resistance groups that control much of the country, and bring it closer to a regime aligned with Iran and North Korea.

What can the United States gain from a government that is partly financed by a criminal economy and does not control rare earths mines, Washington’s chief interest? The answer remains unclear.

Meanwhile, the war continues to drag on, and civilians continue to suffer. Just recently, a regime airstrike killed 50 people, including women and children, in a town in rebel-held Rakhine state.