Today, October 21 Prime Minister Dr. Mahathir Mohamad said amid rising protectionism highlighted by the US-China tariff war, the exports-reliant country could be hit with trade sanctions. He said he was disappointed that proponents of free trade were now indulging in restrictive trade practices on a "grand scale" without mentioning the source of possible sanctions on the South-East Asian country.
The United States and China were two of the three biggest export destinations for Malaysia between January and August this year. Singapore is the top destination.
While addressing a conference in Kuala Lumpur, referring to the US-China trade war he said "Unfortunately, we are caught in the middle, we are linked to both markets economically, and physically we are also caught in between for geographical reasons. There are even suggestions that we ourselves would be a target for sanctions." In order to safeguard the collision between the superpowers, Dr. Mahathir said Malaysia was collaborating more with its regional neighbors.
Dr Mahathir also complained of being bullied by powerful nations, referring to a campaign by European countries against Malaysia's agricultural mainstay of palm oil. The edible oil contributed 2.8% of Malaysia's gross domestic product last year, and 4.5% to total exports. The European Union passed an act earlier this year to phase out palm oil from renewable fuel by 2030, due to deforestation concerns.
He said, "Having cleared most of their forests and refusing to reduce their noxious emissions, they now try to impoverish the poor by preventing them from clearing their forest for living space and earning a living,".
Due to a diplomatic row over comments made by Prime Minister Mahathir on New Delhi's recent actions in the disputed South Asian region of Kashmir, there is also an underlying concern that India, one of the biggest buyers of Malaysian palm oil, would restrict imports of the product.
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