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US Ambassador affirms Malaysia’s economic sovereignty after trade agreement signing

Lol.

“Investment creates jobs in both countries, and jobs in the US pay twice the average Malaysian wage. So, having American companies and investments here will really benefit the people,” said Kagan.

Only twice as much? I remember the days when Western countries (and Singapore) would pay around 3x-4x. I guess those days are behind us.

What Washington’s 'due consideration' means for Malaysia’s RM32.8 billion semiconductor industry

Not sure about the collective amnesia people have to think that for critical sectors that the US can’t produce, that they’ll make it even more difficult for American companies based here. Also considering that I assume backroom guarantees have been made which had provided the greenlight for US investments to surge here within their own conditionalities of course.

According to Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz, the exemptions are valued at US$5.2 billion (RM21.96 billion), accounting for roughly 12 per cent of Malaysia’s total exports to the US.

All that for just a 12% exemption

The US has recently overtaken China as Malaysia’s largest export market and remains its top foreign investor, with total investments reaching RM32.8 billion in 2024.

“In terms of benefit to the Malaysian industries, with a lower import tariff, US products can enter the Malaysian market easily and will be more competitive. This will make high-quality products such as medical equipment, computer hardware and machinery spare parts more affordable for Malaysian businesses and consumers,” Zafrul said.

He added that Malaysian manufacturers could use advanced US machinery and automation tools as inputs to enhance productivity and move up the industrial value chain, aligning with the goals of the National Industrial Master Plan (NIMP).

Crazy cope. Just say the US demanded and you had to concede.

When asked about the long-term reliability of the deal, especially given Trump’s history of abrupt policy shifts, Zafrul replied confidently. “For us (Malaysia), an agreement is an agreement,” he said.

Lol.

By securing tariff exemptions and reaffirming its commitment to stable export policies, Malaysia strengthens its position as a preferred investment destination in the region, a move that could attract even more multinational corporations to establish advanced manufacturing and R&D (research and development) operations in the country.

Sinar Daily is one of the largest Malaysian Chinese language newspapers that also have an English-language column. Fascinating to see what the centrist-liberals think is “good for business”.

Out in the real world:

Malaysia defends US trade pact dubbed ‘act of surrender’ amid sovereignty concerns

Mr Zafrul said the controversial Article 5.1 in the deal does not oblige Malaysia to adopt Washington’s policies, as “guardrails” within the broader text protect national interests. According to him, Malaysia is required to discuss such matters with the US and act only “if necessary”, in line with domestic laws and within a prescribed timeline.

“The provision also stressed that any actions taken by Malaysia have to be on issues of shared economic concern – that is, a shared problem for both Malaysia and the US,” he said.

But Mr Azmin Ali, a former international trade and industry minister, disagreed. The secretary-general of opposition pact Perikatan Nasional called Article 5.1 the “most damaging clause” in the agreement, saying it forces Malaysia to take Washington’s side in its conflicts.

“If Washington decides to block imports from China or Russia, Malaysia must do the same, even if it harms our economy,” said Datuk Seri Azmin in a statement.

“By aligning Malaysia’s policies with US decisions, the agreement risks driving away investors who value Malaysia’s neutrality and stability.” Similar concerns were raised on Oct 28 by the parliamentary select committee on international relations and trade, which announced a hearing on Nov 12 to review the agreement.

Dances with Wolves: Has Malaysia traded Sovereignty for Symbolism?

This ones a longer piece where I recommend reading the entire thing.

The most consequential parts of the pact are buried in the technical annexes and memoranda: – Malaysia agrees not to impose bans or quotas on exports of critical minerals and rare earth elements to the US; – Malaysia will align its supply-chain governance for those minerals with US standards; – Malaysia commits to “non-discriminatory access” for US firms in its semiconductor and critical-minerals sectors.

This is the quiet part of the “Comprehensive Strategic Partnership” upgrade: Malaysia’s critical sectors — minerals, semiconductors, data infrastructure — are now tethered to American geopolitical priorities. That is not the loss of sovereignty in the textbook sense, but it is a substantial narrowing of Malaysia’s freedom to chart its own economic course.

…Compare this with Japan and South Korea, both longstanding US allies. Their economic ties with the US are deep and institutional, not transactional. They operate within long-term industrial frameworks, joint R&D ventures, and multilateral trade architectures like the CPTPP and RCEP. Neither Tokyo nor Seoul was ever asked to sign one-off, multi-billion-dollar purchase pledges as a prerequisite for “strategic partnership.”

China’s model is different again. Beijing engages through investment, infrastructure, and market access — large but patient capital flows into ASEAN, backed by upgraded ASEAN–China FTA commitments. While Chinese financing can carry its own dependencies, it rarely comes with policy dictates about export controls or supply-chain compliance. The contrast is stark: China seeks markets and infrastructure routes; the US seeks supply-chain alignment and political conformity.

Ultimately, perhaps, this discussion is not about Tomahawks at all. These missiles, rather, are simply a totem which demonstrate two important dovetailing points. First, that American resources are not infinite, and as the United States reaches deeper into its bag to help Ukraine, it begins to grab at strategically critical assets that the US military simply cannot spare. Secondly, we must remember that America’s policy in Ukraine is a game of titration, with Washington probing the limits of Russia’s willingness to “eat the strikes” without allowing the reprisal violence to spill out of Ukraine.

In lieu of initiative on the ground, and facing a slow but relentless rollback of their defenses in the Donbas, the theory of Ukrainian victory has shifted in an unacknowledged but dramatic way. After years of insisting that it would achieve maximal territorial integrity - an outcome which would require the total and decisive defeat of Russia’s ground forces - Ukraine has reframed its path to victory mainly as a process of inflicting strategic costs on Russia that mount until the Kremlin agrees to a ceasefire. Consequentially, the debate about arming Ukraine has shifted from a conversation about armor and artillery - equipment useful for retaking lost territories - to a discussion about deep striking weapons like Tomahawks, which can be used to shoot at Russian oil refineries and energy infrastructure. In short, rather than move to prevent Russian from achieving immediate operational objectives in the Donbas, Ukraine and its sponsors are now seeking ways to make Russia pay a price such that victory on the ground is no longer worth it. It is unclear whether they have thought about what price Ukraine will pay in the exchange. Perhaps they do not care.

The key point here, however, is that the concept of Ukrainian victory has been completely transformed. There is now no real discussion of how Ukraine can win on the ground. For the Ukrainian bloc, the war is no longer a contest against the Russian Army, but a more abstract contest against Russia’s willingness to incur strategic costs. Rather than preventing Russian capture of the Donbas, the west is testing how much Putin is willing to pay for it. If history is any guide, a game predicated on outlasting Russia’s strategic endurance and willingness to fight is a very bad game to play indeed.

In an August report signed by Air Force Sec. Troy Meink, which was obtained by Defense News, the service said it needs to “grow to minimize risk” over the next decade, as it focuses on modernizing its current fifth-generation and legacy fighter fleets. Congress ordered the Air Force to produce this report, titled “Long-Term USAF Fighter Force Structure,” as part of the 2025 National Defense Authorization Act. An Air Force official, during a conversation with reporters Thursday, acknowledged this is an aspirational plan that it couldn’t achieve without a significant budget boost. Its primary purpose, the official said, is to send a message to decision makers on what the Air Force needs to carry out all its missions — and if that’s not in the cards, to prepare for scenarios where not all of the service’s desired missions are achievable. “There is insufficient top line, currently, to cover everything that we want to do,” the official told reporters. “We need more Air Force, and this [report] backs it up on the [tactical air] side,” the official said later. “More Air Force is possible. It’s just a matter of whether it prioritizes highly enough, among all the other various things that are required within the department.”

The service said it now has 1,271 combat-coded fighters, including roughly 103 A-10 Warthogs that will be largely retired by the end of fiscal 2026. That would mean growing the combat-coded fighter fleet by nearly 300 tails to bring the service’s risk down to its lowest level — and that’s even before older jets like the A-10s and F-15C head to the boneyard. For the Air Force, low risk would mean it is “very likely” to achieve its objectives, has the full capacity to source combatant commander’s requirements and has the strategic depth to fight a wide range of conflicts with limited stress. To meet objectives with medium risk — which would mean achieving objectives is “likely” — the official said the Air Force would need about 1,367 combat-coded fighters. Significant and high risk would mean the service may not or could not achieve its objectives, with forces only ready to deploy “just in time” or not ready at all, the report said. The force would face prolonged or extreme stress, it added.

Achieving that growth could be easier said than done. There are multiple factors that could throw a wrench into those plans, including lawmakers not providing as much funding as the Air Force wants, industrial limitations on production and the hiccups and delays that often come with developing new military technologies. What’s more, the report said, improving the readiness and effectiveness of the Air Force’s fighter fleet, while sustaining current aircraft, carrying out its current missions worldwide, and dealing with tight budgets and modernization delays presents a challenge to the service.

High stakes modernizing

The Air Force is in the midst of its largest modernization effort in history, as it brings on new fighters such as the Lockheed Martin-made F-35A Joint Strike Fighter and Boeing’s F-15EX Eagle II. At the same time, it is developing an entirely new class of semi-autonomous fighter drones called collaborative combat aircraft, which will fly alongside crewed fighters, and the sixth-generation Boeing F-47, as well as updating its bomber fleet with the B-21 Raider, among other new aircraft. But getting new fighters such as the F-35 developed and fielded is “inherently risky,” the report said, with budget turmoil, technology challenges and industry delays snarling the process. This ends up forcing the Air Force to hold on to older aircraft longer than planned, which creates a vicious cycle that makes sustainment challenges worse, sucks up money that could go to new planes and delays the introduction of new capabilities.

The report also said these goals are what could be met under what amounts to a best-case scenario for the Air Force. A chart in the report’s classified annex “illustrates the potential maximum fighter procurement and maximum industry production with no fiscal constraints.” In the Thursday conversation with reporters, the Air Force official said the service laid out these goals to set “the bar for what is the possibility out there.” “Achieving those numbers assumes that we would have the fiscal resources to do that,” the official said. “The message is, we’re doing our homework, and what our homework tells us is that to achieve certain risk levels, we can do that. It just takes the will to invest that way.” The report calls the F-35 “the foundation of the USAF fighter force structure,” and said the service plans to buy as many of the fighters as Lockheed Martin and other contractors can produce, and continue the jet’s modernization. The service now has roughly 500 F-35s, and eventually wants to buy a total of 1,763.

A chart included in the report said industry can reach maximum F-35A production capacity, producing 100 jets per year for the Air Force, by 2030, as well as hitting a maximum production capacity of 24 F-15EXs by 2027. That could prove challenging for the Air Force. The service typically tries to buy about 48 F-35As each year. But the Pentagon’s 2026 budget proposal released over the summer called for slashing that goal in half. And after multiple delays to the F-35’s Technology Refresh 3 modernization program, an even bigger slate of upgrades called Block 4 is behind schedule and, according to a recent Government Accountability Office report, being scaled back as a result. When asked about the Pentagon’s request to buy fewer F-35s in 2026, and how that squares with the Air Force’s stated desire to dramatically increase its fighter fleet, the Air Force official pointed to the lagging development of Block 4. When the Block 4 upgrades — which will allow the F-35 to carry more weapons and boost its sensors — are ready, the service plans to ramp up its purchases of the jets, the official said. “We’re certainly encouraged by the progress that’s being made on Block 4,” the official said. “But the reality is, it’s not rolling out right now. I think that we will see that change here in the future, and when that occurs, we will have a corresponding change in what’s programmed for F-35.”

The Air Force official said Lockheed Martin can now produce between 130 and 140 F-35s, of all three varieties, each year. But in the future, he said, Lockheed could curtail its production of the short-takeoff and vertical landing F-35B variant, allowing it to produce more F-35As. And if the government’s foreign military sales of F-35s changed — resulting in fewer F-35As being sold to other nations — that could create an inventory big enough for the Air Force to buy up to 100 F-35As per year, the official said.

Challenges abound as fleet shifts

The Air Force is also dealing with a longstanding shortage of pilots, which has been worsened by bottlenecks in the training process, limited manpower and challenges sustaining its current fleet of aircraft. The report underscores the Air Force’s plans to finish retiring all 103 remaining A-10 Warthogs by the end of September 2026, and said divestments of its aging F-15C and D fighters are almost done. The Air Force wants to keep most of its F-15E Strike Eagles, which it calls the “proven combat workhorse of the USAF fleet in every theater of operation.” But the service does plan to prune its F-15E fleet by divesting some fighters with less-capable F100-PW-220 engines, allowing it to focus resources on jets with the F-100-PW-229 engines and improve overall sustainment and mission readiness. The Air Force’s web page on the F-15E said a single 220 engine can produce 25,000 pounds of thrust, and a 229 engine can produce 29,000 pounds of thrust. Both types of engines are made by Pratt & Whitney, and each F-15 has two engines. As jets like the A-10s, older F-15s and block 30 F-16s have aged beyond their original service lives, the Air Force has had to pour more time and resources into keeping them flying. This diverts resources that could otherwise go to modernizing newer planes, the report said, and stretches depot maintenance facilities. Many of them have obsolete technology that is growing increasingly difficult and costly to maintain, while the shrinking industrial base is drying up sources of critical parts for those planes.

There is one major wild card in this report, however, that the service wasn’t sure how to account for: the rise of CCAs, like the General Atomics-made YFQ-42A and Anduril’s YFA-44A that are now in testing. CCAs are intended to carry out multiple missions, including strikes against enemy targets, surveillance, jamming and other electronic warfare operations, and even serving as decoys. When they are fully operational — the Air Force wants a fleet of at least 1,000 CCAs — they will allow the service to get its missions done with fewer manned fighters, helping to burn down some of the risk it faces. But for now, the official said, it’s hard to tell how many manned fighters CCAs will be able to fill in for. CCAs “will affect the bottom line,” the official said. “We don’t know by how much at this point, but certainly that will buy down some of that requirement.”

Germany's decision to purchase an additional 15 American F-35 fighter jets worth €2.5 billion could mark the final rupture in its already fragile defense aviation partnership with France. The move, revealed by Der Spiegel citing classified Defense Ministry documents submitted to the Bundestag's budget committee, underscores Berlin's growing dependence on U.S. technology, and highlights the widening cracks within Europe's ambition to develop its own sixth-generation fighter under the FCAS program. The new aircraft will serve to replace Germany's aging Panavia Tornado fleet, which currently fulfills the NATO nuclear-sharing role. Back in December 2022, Berlin ordered 35 F-35 jets to assume this critical mission starting in 2027. However, the German Air Force has reportedly concluded that the initial number was insufficient to maintain full readiness within the nuclear deterrence component, prompting the move to expand the fleet. The model in question is the F-35A aircraft, the conventional takeoff and landing variant that is both the most affordable and most widely used of the three versions. It is also the only one certified to carry the B61-12 free-fall nuclear bomb, making it indispensable for NATO members involved in nuclear-sharing arrangements. Beyond its nuclear capabilities, the aircraft offers versatility through integration with precision-guided conventional weapons such as the Joint Strike Missile (JSM), bolstering the Alliance's overall deterrence posture.

Yet, this pragmatic defense decision is unlikely to be well received in Paris. French aerospace giant Dassault Aviation, the manufacturer of the Rafale aircraft, has long criticized European states for choosing American platforms over homegrown alternatives. Its CEO, Éric Trappier, has repeatedly framed such moves as a "betrayal of European defense sovereignty", and similar rhetoric is almost certain to resurface following Germany's latest procurement. The timing couldn't be worse for the Franco-German Future Combat Air System (FCAS) program, envisioned as Europe's answer to the F-35 aircraft. Plagued by disputes over technology sharing and industrial leadership, the FCAS program has struggled to progress beyond early development phases. Dassault has insisted on retaining control over around 80% of the work share, a stance that has alienated its German partners and severely strained trust within the consortium.

If Berlin's new deal with Washington goes through, it may effectively seal the FCAS program's fate. The perception that Germany no longer believes in the project's viability could accelerate its collapse, leaving France increasingly isolated in its push for European defense autonomy. For many in Berlin, however, reliability and interoperability within NATO outweigh the political symbolism of "European independence". Germany, meanwhile, appears to be quietly preparing a Plan B. Industry insiders suggest that Stockholm may emerge as an alternative partner, given Sweden's proven record in developing advanced yet cost-efficient fighter platforms such as the Gripen jets.