Malaysian PM Mahathir Mohamad fears sanctions amid US-China trade war

Malaysian Prime Minister Mahathir Mohamad raised concerns about possible trade sanctions on the export-reliant country. Speaking at a conference in Kuala Lumpur on October 21, on a theme ‘Malaysia Beyond 2020’, the Prime Minister talked about the challenges ahead and said that the country is caught in the middle of the US-China trade war.

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The 'new normal'

"Economically we are linked to both markets, and physically we are also caught in between for geographical reasons. There are even suggestions that we ourselves would be a target for sanctions," said Mahathir Mohamad.

He acknowledged that the trade war between the world’s largest economies will have its effect on the trading system but complained that tariffs and counter-tariffs to free trade are becoming the “new normal”. Mohamad called the US-China trade war a “symptom of something far worse”. “It is disappointing to see the proponents of free trade now indulging in restrictive trade on a grand scale,” said Mohamad.

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ASEAN and RCEP

Malaysia is also a part of a regional intergovernmental organisation called Association of Southeast Asian Nations (ASEAN) and they are looking to seal a proposed free trade agreement known as Regional Comprehensive Economic Partnership (RCEP). India, China, Australia, Japan, New Zealand and South Korea are the six nations other than the ASEAN partners under proposed RCEP. Mahathir Mohamad said that the country should prepare for the worst by working with ASEAN neighbours to “cushion the impact of superpower collision”. He also emphasized on developing their own world-class companies that can take on all rivals.

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The US-China trade war

The US-China trade war has escalated and Trump’s allegations of unfair trade practices by China has not helped.

“It has embraced an economic model, dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of the intellectual property and also trades secrets on a grand scale,” said Trump at the 74th session of United Nations General Assembly. "As far as America is concerned, those days are over," he added.

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