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Malaysia may become a target of sanctions as the export-reliant economy is caught in the crossfire of the U.S.-China trade war, according to Prime Minister Mahathir Mohamad.
Mahathir said trade tensions between the world’s two biggest economies could evolve into another Cold war, although he didn’t specify who could impose the curbs.
“Economically we are linked to both markets, and physically we are also caught in between for geographical reasons,” Mahathir said in Kuala Lumpur. “There are even suggestions that we ourselves would be a target for sanctions.”
He said Malaysia will prepare for the worst by cooperating with regional neighbors, but didn’t elaborate.
Neighboring Vietnam has already drawn the U.S. government’s ire, with President Donald Trump describing the Southeast Asian nation as “almost the single worst abuser of everybody” when asked if he wanted to impose tariffs on the nation.
Malaysia was placed on the U.S. Treasury watch list for currency manipulation in May for its bilateral trade and current-account surplus. The central bank has denied the nation manipulates its currency and said it supports free and fair trade.
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