Kuala Lumpur. The newly signed trade agreement between Malaysia and the United States has drawn strong backlash, with critics accusing Kuala Lumpur of “surrendering its economic sovereignty,” according to local media reports.

One of the most contentious provisions reportedly requires Malaysia to align with US trade sanctions or restrictions imposed on other countries -- a clause that critics say undermines Malaysia’s long-standing neutrality.

Former Trade and Industry Minister Mohamed Azmin Ali warned that if the US were to restrict imports from countries such as China or Russia, Malaysia would be compelled to follow suit, even at the expense of its own economy.

“This clause forces Malaysia to take sides in other people’s conflicts and destroys the neutrality that has long been our strength,” Azmin was quoted as saying by the Scoop news website on Monday.

He added that the clause could discourage investors who value Malaysia’s reputation as a neutral and stable partner.

Azmin argued that the deal effectively places Malaysia in a position where it cedes control over major economic decisions, while the United States retains flexibility to act in its own interests.

“What is being described as a ‘reciprocal partnership’ is, in truth, the loss of our economic sovereignty and policy space,” he said.

Veteran politician Teng Chang Khim of the Democratic Action Party called on the government to clarify the terms of the deal, particularly those that appear to heavily favor the United States.

Among the disputed provisions is one that requires Malaysia to consult Washington before entering into any new digital trade agreement with another country “that jeopardizes essential US interests.”

Another clause reportedly allows the US to reimpose a 25 percent tariff, first announced in April, if Malaysia strikes a bilateral trade deal with any nation considered to “jeopardize US interests.”

“If they were true, the government needs to explain why these clauses do not jeopardize the sovereignty of Malaysia,” Teng said in social media posts.

Prominent political commentator Eric See-To said the terms effectively bind Malaysia to serve US national security priorities.

“The direct effect is that Malaysia loses the right to determine its own trade and diplomatic policies towards other nations. If the US imposes sanctions on any country, Malaysia is automatically expected to follow suit, even if that country is an important trading partner of Malaysia,” he told Malaysia Now.

He cautioned that the agreement could deeply entangle Malaysia’s trade and foreign policy with Washington’s geopolitical agenda.

“If Washington imposes sanctions, Malaysia is no longer free to remain neutral. Instead, it is forced to follow America’s lead,” he said.

According to a joint statement released by the White House, Malaysia also agreed not to ban or impose export quotas on rare earth minerals destined for the United States -- a move analysts see as a direct counter to China’s dominance in the sector.

The agreement further stipulates that Malaysia must mirror any punitive trade measures imposed by the US, such as customs duties, quotas, fees, or import restrictions.

It states that once notified of such actions,

“Malaysia shall adopt or maintain a measure with equivalent restrictive effect as the measure adopted by the United States or agree to a timeline for implementation.”