When the Agreement on Reciprocal Trade (ART) between Malaysia and the United States was signed on 26 October 2025, few could have predicted the political storm that would follow. What was initially presented as a forward-looking trade deal by Prime Minister Datuk Seri Anwar Ibrahim’s administration has now become a lightning rod for accusations — not only from the opposition and Tun Dr. Mahathir Mohamad, but increasingly from within Anwar’s own government and party allies.
According to Azmin Ali, the Agreement on Reciprocal Trade is “anything but reciprocal.” The Perikatan Nasional secretary-general accused the government of surrendering Malaysia’s economic sovereignty to the United States, calling the pact a “one-sided deal” that undermines the country’s independence and neutrality.
Azmin’s criticism centered on Article 5.1 of the deal, which, he said, forces Malaysia to mirror any US trade sanctions or restrictions against other countries. In other words, if Washington blocks imports from China or Russia, Malaysia must follow suit — even at the expense of its own economy. “This clause,” Azmin warned, “forces Malaysia to take sides in other people’s conflicts and destroys the neutrality that has long been our strength.”
Azmin also claimed that the ART forces Malaysia to adopt American standards for food, medicine, and vehicles, and weakens Malaysia’s halal certification system by recognising foreign certifiers. Worse still, he said, the deal prevents Malaysia from taxing global tech giants or demanding local data storage, effectively handing control of our digital economy to foreign hands.
For the former economic affairs minister, this wasn’t just bad economics — it was a betrayal of sovereignty. And he wasn’t alone in that sentiment.
Anwar’s Allies Break Ranks
In an extraordinary move, several members of Anwar’s own coalition — including Wong Chen, Nik Nazmi, and Rafizi Ramli — issued a joint statement expressing grave concerns about the same trade deal.
The trio, all senior MPs in the Madani Government, said they were “convinced that the Agreement is heavily lopsided in favour of the United States.” More alarmingly, they confirmed that Malaysia had been “forced into the negotiations” and that the pact was not an equal partnership.
Their statement underscored that Articles 5.1 to 5.3 of the agreement would limit Malaysia’s sovereign rights, compelling the country to align with US national security and economic interests. This, they warned, would represent a “major departure from Malaysia’s long-standing policy of active neutrality and ASEAN centrality.”
While the MPs acknowledged that Malaysia retains an “exit clause” — allowing termination under Article 7.4 — they also cautioned that this did not erase the fundamental question: why sign such an agreement in the first place?
Their joint statement called for the formation of a Royal Commission of Inquiry (RCI) to investigate the circumstances surrounding the signing of the pact, particularly the allegation that Malaysia was “forced” to negotiate. They also urged the government to engage international trade lawyers, amend sovereignty-related clauses, and conduct a comprehensive cost-benefit analysis of the deal’s economic impact.
For government MPs to publicly call for an RCI into their own administration’s agreement — and to question whether the country had “signed away its sovereignty” — was nothing short of unprecedented.
Mahathir: “We Handed Over Our Independence”
If Azmin’s criticism was fierce, Tun Dr. Mahathir Mohamad’s was incendiary.
In a statement titled “Handing Over Our Independence”, Mahathir lambasted the Anwar administration for what he called “modern-day imperialism”.
“I never thought I would live to witness how Malaysian leaders would surrender our independence merely for a few minutes of grandstanding and a pat on the head by a foreign leader,” Mahathir wrote.
Drawing on the language of postcolonial struggle, Mahathir accused Anwar’s government of betraying the very spirit of Merdeka. He compared the US-Malaysia trade pact to colonial subjugation, arguing that it stripped Malaysia of the very autonomy it had fought for in 1957.
“Back then,” Mahathir reminded readers, “we had the Dawn Raid and the Buy British Last policy — examples of how fiercely we guarded our sovereignty.” But under the new trade agreement, he said, Malaysia had effectively agreed to buy American planes, gas, and machinery, to follow US digital rules, and to let Washington dictate who we can or cannot trade with.
“All this,” he said, “for a tariff relief which is merely crumbs.”
In Mahathir’s view, even the much-touted “exit clause” was meaningless. “If the conditions are choking Malaysia of its independence,” he asked, “why enter it in the first place?”
He concluded that the deal represented “a modern-day imperialism — the neo-colonialism our founding elders had warned of.”
A Deal That Divides More Than It Unites
What makes this controversy particularly damaging for Anwar Ibrahim is that it cuts across partisan lines. Opposition leaders like Azmin Ali and Mahathir Mohamad are attacking him from one flank, while respected figures within Pakatan Harapan — like Wong Chen and Rafizi Ramli — are raising alarm bells from within.
For a government that has prided itself on the language of “Madani governance”, transparency, and national dignity, the optics could not be worse. The idea that Malaysia was “forced” into a lopsided deal with a foreign superpower undermines Anwar’s long-cultivated image as a statesman who stands tall among equals.
The fact that even government insiders are calling for a Royal Commission of Inquiry suggests that this issue is not going away soon. Nor will the opposition allow it to fade. In a climate already charged with economic anxiety and geopolitical realignment, the accusation that Anwar “sold the country to America” could prove politically toxic.
Between Neutrality and Alignment
Malaysia has long prided itself on being a neutral trading nation, maintaining friendly ties with both the United States and China, while emphasizing ASEAN centrality and non-alignment.
But under the new US–Malaysia Agreement on Reciprocal Trade, critics say neutrality has been traded for compliance. Azmin Ali’s warning that Malaysia would now be compelled to follow US sanctions policy is particularly alarming for businesses that depend on regional stability and diversified partnerships.
Even among Malaysia’s diplomats, there is unease that the agreement might strain ties with Beijing, complicate Malaysia’s standing within BRICS, and dilute ASEAN’s role in regional economic architecture.
Anwar’s Gamble
In Parliament, Anwar Ibrahim defended the agreement, insisting that Malaysia retains full control and that the exit clause provides flexibility. He argued that the pact would bring new opportunities in digital trade, semiconductors, and pharmaceuticals, and help attract high-tech American investment.
However, the chorus of dissent — from Azmin Ali, Wong Chen and Rafizi, and Dr. Mahathir — paints a far darker picture.
If Anwar has gambled Malaysia’s neutrality for short-term economic relief, he may soon discover that the political cost of this decision outweighs any financial benefit. Because in the eyes of his critics — and increasingly, his allies — this deal isn’t just about trade.
It’s about whether Malaysia has once again allowed itself to be ruled from abroad.
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