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[SINGAPORE] US President Donald Trump has not set conditions for his attendance at the upcoming Asean Summit in Kuala Lumpur later in October, said Malaysia’s Minister of Investment, Trade and Industry Tengku Zafrul Aziz.

“From our understanding, there are no conditions. No conditions at all,” Zafrul said in an interview with The Straits Times on Oct 8.

US-based political news site Politico reported on Oct 6 that Trump had requested a ceremonial signing of a peace deal between Thailand and Cambodia during the meeting, a condition that would have put Prime Minister Anwar Ibrahim in a bind.

“No, we are not aware (of this),” said Zafrul.

The minister said the matter was not brought up during his video call with one of the deputy US trade representatives (USTRs) on Oct 7. Bryan Switzer is the deputy USTR in charge of Asia.

“We are on track, and (the deputy USTR) is coming next week. The whole USTR negotiating team is coming to Malaysia on Oct 13,” Zafrul said on the sidelines of the Asia Future Summit 2025 (AFS) in Singapore on Oct 8 and 9.

The AFS is a premier thought leadership conference jointly held by SPH Media flagship titles The Straits Times, Lianhe Zaobao and The Business Times, with OCBC as the presenting sponsor.

Zafrul’s response – a reflection of how his role as Malaysia’s chief negotiator for trade and investment has now been inextricably overlaid by fragmenting geopolitics – comes as Malaysia seeks to navigate complex trade negotiations with the Trump administration, which has imposed a 19 per cent tariff on goods from Malaysia, which is among other countries facing reciprocal duties.

He expressed confidence that Malaysia and the US will be able to sign a reciprocal trade agreement that would suit both nations’ domestic priorities during Trump’s controversial visit during the 47th Asean Summit from Oct 26 to 28.

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The US president’s attendance is controversial due to Washington’s backing of Israel in the Gaza war. 

Activists have urged Anwar to rescind his invitation, but the prime minister insisted on Oct 8 that diplomatic engagement is necessary to achieve change.

The US has previously accused Malaysia’s halal certification, pro-Bumiputera policies, and restrictions against foreign ownership as barriers to trade. Anwar has insisted that these are “red lines” that Malaysia will not cross.

Bumiputeras, or “sons of the soil”, refer to the Malays and other indigenous people in Malaysia.

Regardless, Malaysia has said that it will continue negotiating with the US, even as it seeks an amicable relationship with economic rival China. Both countries remain Malaysia’s biggest investors and trade partners – consequently, it cannot choose sides.

Zafrul expressed his anxieties about how supply chains are no longer determined by commercial viability, and factors such as cost-effectiveness and logistical advantages.

“Now it’s also about economic security. So when you talk about economic security, it is very much becoming geopolitical,” he said, explaining how the US does not wish to have its supply chain intertwined with China.

He previously suggested in a South China Morning Post interview that manufacturers can implement a “two kitchen” strategy, with separate supply chains for the US and China, as both economies wish to secure their advantages. However, he doubts that this is necessary for Asean and Malaysian firms.

“At the end of the day, if you look at the technology that we have, it’s not deemed as sensitive or critical,” he said.

“We produce certain parts of certain components that are required. But the technology itself, the end product, is not done by Malaysian companies. Or any Asean companies, for that matter.”

Shortly after this interview, The New York Times reported on Oct 9 that the US authorities are investigating Singapore-based cloud computing service provider Megaspeed over suspicions that it helped Chinese firms evade American export controls.

It reported that in 2023, Megaspeed had set up a subsidiary in Malaysia by purchasing nearly US$2 billion worth of Nvidia’s advanced AI chips – which were then funnelled to data centres in Malaysia and Indonesia that serve Chinese customers.

Asean needs Asean

With the fracturing of geopolitics and increasing protectionism from the US, Zafrul warned that more countries may wish to emulate Trump’s US, when their citizens face recession and unemployment.

“Right now, we look at the growth, it’s still there. People still have jobs, because the country needs the economy to continue to be open. But once a country faces recession, people lose jobs, and they will start saying that maybe Trump is right,” he said, pointing to a possible grim future for Asean member nations.

Zafrul reiterated the need for the 10-member regional grouping to strengthen each other’s economies by banking on the consumption strength of their collective population of over 680 million people.

“We will need each other to grow. Why is the US strong? Because GDP is also driven by consumption. They have the spending power, the household income,” he said.

“Hopefully, if Asean gets wealthier, the demand can come from Asean. So our producers would not just have to rely on one big market. Because last time we relied on the US, now we rely on the US and China – and Europe, of course now, is a bit stagnant. So actually, Asean has to rely on Asean.”

In his fireside chat during the AFS, Zafrul had touted the upgraded Asean Trade in Goods Agreement (Atiga) as part of efforts to move closer to the grouping’s single-market goal. The Atiga, a key free trade accord first signed in 2009, will be updated to further simplify trade procedures and harmonise customs standards across member states.

He had also highlighted the Asean Digital Economy Framework Agreement (DEFA) as one of the grouping’s most significant initiatives. Once completed, it is expected to double the value of Asean’s digital economy from a projected US$1 trillion to US$2 trillion by 2030.

“We need to be more inclusive to get SMEs to be involved in the exports, and even micro-SMEs,” he said, referring to small and medium-sized enterprises.

“Hopefully with DEFA, then you have e-commerce which is more secure, makes payment easier, standardised guidelines and laws. It’ll be easier for even mom-and-pop businesses to try and sell something, right?”

It is estimated that there are over 70 million micro, small and medium-sized enterprises in the region, contributing nearly half of gross domestic product.

Is capitalism still the answer?

Faced with this breakdown in global economy and trade, Zafrul admitted he now sits at a peculiar crossroads. After six years in government and two decades as a banker, he has begun questioning the free-market system that defined his career.

“I’m questioning what I’ve learnt in university. I am a capitalist, I was the CEO of a bank. And now that I’m on the other side, I’m questioning a lot of things.”

“I don’t believe in complete free markets. I’m questioning that because free markets benefit a few… We always assume everyone has equal access to everything. Actually, they don’t,” he told ST.

Zafrul will end his second and last term as a senator in December. Three successive prime ministers from different political parties have all sought to retain him in their Cabinets since he joined the government in 2020.

His last stint as a banker was as the chief executive of CIMB Group, which is among Malaysia’s top three biggest banks. He was appointed finance minister under then prime minister Muhyiddin Yassin, and kept the portfolio when Ismail Sabri Yaakob took over.

When Anwar won the general election in 2022, he also named Zafrul to his Cabinet. In August 2025, Zafrul joined Anwar’s Parti Keadilan Rakyat (PKR).

Zafrul, who will have to relinquish his ministerial post when his senatorship ends, has already said he plans to continue contributing to Anwar’s government in any way possible.

Observing that young Malaysians no longer believe in upward mobility despite GDP growth, Zafrul believes that Anwar’s Madani Economic Framework will be able to uplift Malaysians’ economic status.

The framework aims to tackle rising costs of living and promote inclusive growth through “raising the floor” by improving quality of life, and “raising the ceiling” by strengthening the economy.

“I think in my father’s time, there was a belief in upward mobility. The younger generation, they don’t feel that … Now, you ask the young, they feel hopeless,” Zafrul said, describing wage stagnation.

In Budget 2025, Anwar had announced a minimum wage of RM1,700 (S$523) that took effect fully on Aug 1.

Other policies across the government also mirror this shift for more inclusive growth, such as the cash assistance programmes, free meals for needy students, and grants for the digitalisation of SMEs.

Zafrul’s questioning reflects broader anxieties within Malaysia’s technocratic elite. The country’s development model – export-oriented manufacturing, foreign direct investment and trade liberalisation – has delivered GDP growth, but shared prosperity has not been felt as sharply.

The mood in Malaysia has shifted. There is a growing antagonism against elitism and entitlement, mirroring similar developments in neighbours Indonesia and the Philippines.

An Oct 4 protest against mass housing developments in the affluent Damansara Heights neighbourhood joined by, among others, former minister-turned-political podcaster Khairy Jamaluddin and former CIMB Group chairman Nazir Razak – all Zafrul’s contemporaries – received brickbats from Malaysians online.

Zafrul admitted that a stronger push to remedy inequality requires massive political will.

The Anwar administration, for example, succeeded in implementing a new RON95 fuel subsidy system that may save up to RM4 billion annually, but other measures such as a luxury goods tax failed to take off after pushback from the elites.

Any comeback by Zafrul after his tenure ends will reveal whether his philosophical evolution can be realised in concrete policy shifts. A return in an advisory capacity may help shape genuine policies on levelling the playing field for all Malaysians.

For now, Zafrul has dismissed any ploy to trigger a by-election for him to contest in a bid to remain in the Cabinet. He has denied that his move to PKR came with a promise that he would contest the Ampang federal seat. The next general election must be held in Malaysia by February 2028.

“I don’t think it’s fair to the country for me to contest in any seat, just for me to continue my ministership. Of course, in the general election, I hope to be given a chance to contest,” he said. THE STRAITS TIMES