November 11, 2024
KUALA LUMPUR – ONE of the first things that crossed my mind as Donald Trump made a comeback as the President of the United States is that will he make his way to Malaysia next November to meet his South-East Asian counterparts at the Asean summit that will be held in Kuala Lumpur.
When he took office in the first round in 2017, Trump attended the Asean Summit when the Philippines was chair that year. He skipped the next three Asean summits and even during the Covid-19 years when summits and meetings were held online, he gave the 2020 Hanoi virtual Asean summit a skip.
His attendance record at the Asia Pacific Economic Cooperation (Apec) Summit is quite poor too. He did, however, attend the virtual summit hosted by Malaysia in 2020 amid his election loss to Joe Biden.
Trump attracted attention when he joined the virtual summit because as other leaders had the official Apec backdrop on their screens featuring the Prime Minister’s Office green dome in Putrajaya, Trump appeared with a beige background.
Prime Minister Datuk Seri Anwar Ibrahim in an immediate congratulatory message to Trump this week said, as Asean chair in 2025, Malaysia hopes that America will reinvigorate its engagement with South-East Asia.
The Asean summit, with or without Trump, will of course still go on as other world leaders from China, Russia, Japan will be attending but it is a test for Anwar and Malaysia to convince Trump to come to this part of the world.
Beyond the Asean chairmanship, however, a bigger challenge awaits Malaysia as a trading nation with the United States now that Trump is back in power. Trump is known to be inward looking and this was evident during his first presidency.
Going into his second term, Trump has vowed across-the-board tariffs of 10% to 20% on all imports arriving in the United States, and this will definitely impact Malaysia. He has also proposed a 60% tariff on imports from China.
These protectionist measures are designed to safeguard US manufacturers from foreign competition and aim to revitalise American industries.
“This inward looking view is not good for global trade and multilateralism. This is the challenge for Malaysia, which depends on the overseas market, and we cannot deny the United States is an important market,” said a Malaysian official.
“Trump sees tariffs as a way to grow the US economy, protecting jobs and raising tax revenue. His inward looking policies will pose a huge challenge to global trade and the multilateral trading system,” added the official who is familiar with free trade agreement negotiations, both bilateral and multilateral.
According to the US Trade Representative website, US goods and services trade with Malaysia totalled an estimated US$78.3bil (RM344.1bil) in 2022. Exports were US$21.6bil (RM94.9bil); imports were US$56.7bil (RM249.2bil).
Trump’s handling of relations with China will be closely watched, especially with his plans to impose a tariff of at least 60% on Chinese imports.
On hindsight, Malaysia may just benefit if some foreign investors decide to look to diversify manufacturing and supply chains away from China. This will involve relocation of their businesses to countries like those in South-East Asia to ensure these companies can continue exporting to the United States while avoiding the higher tariff.
But Malaysia must be mindful: If another trade war occurs between the United States and China, countries with a lot of Chinese investments that export to America may feel the heat.
“The US can use this as an excuse to impose high tariffs on third countries deemed to be a backdoor for Chinese products.
“The risk is if the US suspects China’s products are entering its market through third countries, that should be a concern, as the US may introduce measures that will impact our exports negatively,” said another official.
Malaysia should already be looking at the risks and opportunities from the higher tariff, protectionist measures, and potential economic ripple effects in the next four years.
Malaysia’s Asean 2025 chairmanship coincides with Trump’s second term in Washington and this is the time for Malaysia to position itself strategically in strengthening Asean-US relations, not just via the economy but also tackling other global issues like the war in Gaza. Trump has promised to stop the wars in Ukraine and the Middle East but critics are questioning how he will do that.
Malaysia should provide regional leadership and a clear narrative as well as engage with the United States under Trump’s administration. For sure Malaysia will not be doing it alone as it has the support of the other nine Asean member countries.
It is interesting to note as Trump was declared the winner in the US elections, Anwar was on another working trip in China, engaging with President Xi Jinping and other Chinese leaders.
While the schedule may be coincidental, the trip took place during this delicate time to balance relations with both sides of the globe in this uncertain geopolitical environment.
What will Trump do next? Well, the whole world is still speculating.
There is no doubt that Malaysia’s ties with China are at all time high but that aside, perhaps Malaysia needs to get America’s attention on Asean again. The timing of Malaysia’s Asean chairmanship and Trump’s second term in office offers a rare opportunity for Malaysia to show regional leadership while enhancing bilateral relations – it could even make both countries “great again”.