By Samirul Ariff Othman
KUALA LUMPUR, Malaysia: During his first term, Donald Trump’s "America First" approach was marked by deep skepticism toward global trade agreements, which he criticized as unfavorable to US interests. This stance included direct critiques of the World Trade Organization (WTO), which he viewed as a constraint on US sovereignty and a platform that, in his opinion, allowed other countries —especially China —to take advantage of US markets.
Trump repeatedly threatened to pull the U.S. out of the WTO, claiming it was biased against the US. and insufficiently responsive to the unfair trade practices he accused China and other nations of pursuing. He saw the WTO’s dispute resolution mechanism as ineffective and often harmful to US trade policies, signaling that his administration would rather bypass or even abandon the institution if it continued to resist reforms that served American interests.
Trump’s trade agenda also led to his withdrawal from the Trans-Pacific Partnership (TPP) in 2017, which he argued would harm American jobs. He was particularly wary of multilateral trade agreements, favoring bilateral deals where he believed he could negotiate more favorable terms.
Under this same logic, he famously renegotiated the North American Free Trade Agreement (NAFTA), which he called the "worst trade deal ever," rebranding it as the United States-Mexico-Canada Agreement (USMCA). This new agreement was intended to increase protections for US workers and industries, especially in the automotive sector, which Trump argued had been hurt by the outsourcing of jobs to Mexico under NAFTA.
When it came to Europe, Trump showed little interest in advancing the proposed Transatlantic Trade and Investment Partnership (TTIP) with the European Union (EU), preferring to renegotiate trade terms with European countries individually. He frequently complained about what he saw as Europe’s protectionist policies, which he claimed unfairly restricted American exports, particularly in sectors like agriculture and technology. He even imposed tariffs on European goods such as steel and aluminum, sparking retaliatory measures and a trade standoff that affected Trans-Atlantic relations.
Overall, Trump’s approach to trade policy was distinctly isolationist, driven by a belief that global agreements too often compromised US sovereignty and allowed other countries to exploit US openness. When he returns to office, we could expect more confrontational moves against multilateral trade institutions like the WTO and a continued focus on bilateral agreements with an US-centric agenda —one likely to drive new waves of trade friction, especially with close trading partners who value free and open trade.
China + 1 Arrangement under scrutiny
The second Trump presidency will most likely advocate an enhanced "America First" trade stance from the US, therefore countries like Malaysia and Vietnam face a complex balancing act. Both have emerged as strategic players in the "China+1" model, attracting foreign investors and manufacturers looking to diversify supply chains outside of China.
However, this advantage could bring scrutiny. The US may view these countries as potential backdoor entry points for Chinese companies looking to circumvent tariffs and trade restrictions imposed on goods coming directly from China. US authorities could intensify investigations into supply chains, placing greater pressure on Malaysia and Vietnam to demonstrate that goods exported to the US have minimal Chinese inputs or that companies are not simply rerouting products to evade tariffs.
To mitigate a potential backlash, Malaysia and Vietnam could take proactive steps by strengthening their transparency in supply chain practices. This could include instituting clearer guidelines on the origin of goods, emphasizing local content requirements, and working closely with US regulators to assure compliance with rules of origin.
Additionally, both nations could ramp up efforts to attract high-value-added industries and develop more skilled domestic labor forces, creating a clearer distinction between themselves and Chinese manufacturers. This approach not only aligns with their development goals but also demonstrates to the US that they are committed to building independent, diversified economies rather than serving as mere conduits for Chinese goods.
Strengthening multilateral partnerships within ASEAN and with other economies like Japan, South Korea, and the EU could also be part of a resilience strategy. By embedding themselves in a broader network of trade agreements, Malaysia and Vietnam can signal to the US that their economic interests are both regional and global, and not solely tied to Chinese investment. These moves would enhance their legitimacy as stand-alone investment hubs while cushioning them against any potential protectionist shifts that a "China+1" backlash could bring from Washington.
In conclusion, Trump’s trade policies during his first term, were characterized by a strong skepticism of multilateral trade agreements and a preference for bilateral deals. This challenged existing trade frameworks like the WTO and left lasting impacts on international trade dynamics. If an augmented “America First” approach were to return, Malaysia and Vietnam, as integral players in the "China+1" strategy, could face scrutiny from US authorities concerned about circumvented tariffs and trade restrictions.
By strengthening supply chain transparency, reinforcing local content standards, and deepening regional partnerships, Malaysia and Vietnam could better position themselves as independent economic hubs, safeguarding against any potential backlash from the US while at the same time enhancing their roles within the ASEAN region and beyond.
*Economist Samirul Ariff Othman is an adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and a senior consultant with Global Asia Consulting. He has a background as a senior researcher at the Malaysian Institute of Economic Research.*
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