Just What Do Trump's "Trade Deals" Consist of? Nothing
Malaysia deals with a chaos-monkey superpower: empty appeasement coupled with steps at derisking via exit from coupled arrangements that create vulnerabilities…
A “consultation” clause beats nothing when you face a hegemon acting on chaotic impulse. As PR optics steer the Potemkin “policy” of Donald Trumps, savvy partners sell photo‑ops—not allegiance. And they take steps to derisk and decouple as the way to buy what insurance they can against capricious and unmotivated attempts to exert power. Hold tight to this: Trump’s trade “deals” aren’t deals—they’re stage directions for an impulse‑driven executive. Malaysia read the script and wrote itself a “call us first” clause.
Alan Beattie: The US can’t force Asian countries into its trade camp <https://www.ft.com/content/62e54b1e-1558-4692-b825-c4a6d08f8bc4>: ‘The US apparently gained… in… deals with Cambodia and Malaysia… [that were] unusually detailed by Trump’s standards — were the first of a planned string of deals with Asean nations… On the face of it… forc[ing them] to choose between the US and China…
But not really. First, it is not a binding “deal”:
There is no formal dispute settlement system with an independent panel, just the prospect of Trump acting as judge, jury and vengeful executioner…
Second, well:
Why did Malaysia sign?… [To avoid restrictions on] the electrical and electronic products… Malaysia sells… which help to make America its second-biggest national export market…
But what are the consequences for Malaysia of signing? None:
Zafrul Aziz, Malaysia’s trade minister, told me this week that the deal created a system of formal consultation rather than automatic alignment. “We are very clear that any actions taken under the agreement will be based on Malaysia’s interest and under Malaysian law,” Zafrul said. “There’s a consultation process, and if it’s not in our interest to follow the US we won’t….. If we don’t agree then we face the consequences and the US can put on tariffs or whatever, but at least this way we get to put our point of view. Otherwise they can do what they want without explaining the rationale…”…
So has Malaysia chosen to ally with the U.S. on trade issues vis-à-vis China? No:
The US offers an export market, but these days an increasingly fickle one…. China offers rare earths and green tech. Neither is dispensable.As Zafrul told me: “We signed this [US deal] on Sunday. On Monday, we signed an [Asean] agreement with China.”… Agile governments… resist being turned into economic satellites. It’s not a comfortable place to be, but… not a powerless one…
The most you can say about the “deal” is that it is a recognition by Malaysia that the strong do what they can and the weak suffer what they must. Except that, under Trump, “the strong do what they can” does not cut it, for the meaning in Thoukydides’s Thoukydides, an Athenian, wrote the history of the war… is that the Athenians will do whatever is to their advantage. But in the case of the Trump administration, the Trump Administration will instead do something completely random, but its actions can be somewhat shaped by giving it the PR bonus of an apparent “win” of some kind.
Thus this looks to me like a marginal win for Malaysia: the U.S. has now committed itself to inform Malaysia before it does something random and destructive, and that gives Malaysia a chance to dredge up a way to offer Trump another PR-event boost in advance, rather than having to pay catch-up after some random action.
And, of course, this is a marginal loss for the United States. Or perhaps it is part of a pattern that will turn out, in aggregate, to be not a marginal but a substantial loss?