ASEAN SUMMIT - WHAT TO EXPECT – Overview by Nik Zafri

PHOTO SOURCE : MALAYMAIL

Disclaimer: The following reflects my personal opinion and interpretation, based on open sources available both internationally and domestically. The information presented here is considered to be in the public domain. However, readers are encouraged to refer to the original sources for accuracy and context. The author bears no responsibility for any inaccuracies, misinterpretations, or consequences arising from the use of this content.

US-China Trade Truce: A Strategic Pause or Temporary Relief? - Nik Zafri Analyzes

 

The recent de-escalation of trade tensions between China and the United States, marked by a mutual reduction of tariffs, is a major development in global economics. 

1. HOW

1) Negotiation Rounds: Trade officials from both countries likely engaged in extensive diplomatic talks behind closed doors, exchanging proposals and concessions. 

2) Agreement on Tariff Reductions: A phased reduction in tariffs was probably agreed upon, targeting key sectors (e.g., agriculture, tech, manufacturing). 

3) Public Announcements and Policy Changes: Both governments made coordinated announcements, possibly issuing official decrees or modifying customs schedules. 

4) Monitoring and Review: Mechanisms may be in place to monitor compliance and re-evaluate tariffs in case of disputes or economic shifts.

2. WHY

1) Economic Slowdown Risks: Both economies have felt the strain, higher costs for businesses, inflation, and supply chain disruptions.

2) Global Pressure: The IMF, WTO, and global investors often urge the world’s two largest economies to cooperate for global economic stability.

3) Political Calculations: Leaders may aim to secure domestic support or prepare for elections by easing tensions.

4) Supply Chain Security: Companies and governments want more predictable access to goods and materials.

3. ECONOMY

3.1 Positive

a) Trade Growth: Lower tariffs make goods cheaper, boosting import/export volume between the two countries.

b) Reduced Costs: Businesses save money on raw materials and components, improving margins or reducing prices.

c) Market Confidence: Investors view the easing of tensions as a sign of stability, boosting stock markets.

d) Inflation Control: Lower import costs can ease consumer prices, helping central banks manage inflation.

Global Spillover Effects

e) Revived Global Trade: Other economies benefit from more fluid trade routes and reduced global uncertainty.

f) Currency Stabilization: Less volatility in the yuan and dollar helps stabilize emerging market currencies.

g) Investment Recovery: Global investors may resume or expand investments in both Chinese and U.S. markets.

3.2 Potential Risks

a) Uneven Gains: Some domestic industries (especially those previously protected by tariffs) might face new competition.

b) Geopolitical Complexity: While tariffs ease, tech and military tensions may continue in other forms.

4. ONLY FOR 90 DAYS?

Whether the U.S.- China tariff de-escalation lasts only 90 days or becomes a continual process depends on several key factors:

4.1 If 90 days

a) Allow time for further negotiations.

b) Monitor initial compliance.

c) Defer harsher measures while assessing political and economic reactions.

Such a truce typically includes benchmarks both sides must meet (e.g., increased purchases, IP enforcement, transparency). If either side fails, tariffs could return or escalate.

4.2 If Continual

It will require:

a) A signed trade agreement or treaty with defined terms.

b) Long-term policy alignment on key issues like technology transfer, market access, and subsidies.

c) Mutual political will, especially through leadership transitions or election cycles.

If this current easing is part of a trial period, it's likely to last 90 days, with potential to extend. However, if both parties see strategic benefit, it could evolve into a more stable, ongoing trade relationship.

5. UNCHANGED TARIFFS

Automobiles & Auto Parts, Pharmaceuticals, Aluminum & Steel (Section 232 Tariffs)

These exclusions do still affect the economy, despite overall tariff reductions in other sectors.

5.1 Impact on Other Countries

 5.2 Global Trade Dynamics

• Trade Diversion: Countries not facing tariffs (like Vietnam or Mexico) might see increased demand.
• WTO Role: Allies may press the U.S. at WTO for consistent, rules-based trade policies.
• Investment Hesitancy: Companies may still hesitate to invest if tariffs on key inputs persist.

Even with partial tariff relief, leaving out major sectors like autos, pharmaceuticals, and metals keeps significant economic friction in place. The global response (especially from allies) will depend on whether the U.S. extends tariff relief beyond China or maintains a fragmented approach.

 

5.3 Why Keep Tariffs on Pharmaceuticals, Automobiles, and Aluminum/Steel?

 

Trump argued that leaving these tariffs in place serves one core purpose:

 

To bring manufacturing and strategic industries back to the U.S. 

("If it's made in America, it's better for our jobs, our national security, and our

 independence.")

 

5.4 Can This Be Done Without Hurting the U.S. Economy?

Here’s where economists are divided, because while tariffs protect jobs, they also come with costs. 

Bottom Line - Can it be done without economic impact?

Not entirely. There will always be trade-offs.

But Trump's approach is to accept short-term consumer pain or cost increases in return for long-term gains in industrial capacity, jobs, and strategic autonomy.

It's a "rebuild-from-within" philosophy (protectionist), but aimed at revitalizing U.S. self-sufficiency.

5.5 Global Impact Matrix

6.0 THE 2019 “GOOD DEAL” THAT WENT SOUTH

I believe it's important to revisit the 2019 U.S.- China trade deal, during which both countries were engaged in months of intensive negotiations aimed at resolving ongoing trade tensions

US stated that it was “great deal” reached or was close to being finalized that would:

• Open China's markets further to U.S. companies ("Open China" - which in the recent 2025 deal, China is said still thinking about it)
• Increase Chinese purchases of U.S. goods (esp. agriculture and energy)
• Protect U.S. intellectual property
• End forced technology transfer for American firms
• Include enforceable mechanisms to ensure compliance

In the final stage, US said that China revised key parts of the draft agreement.

They allegedly removed commitments related to enforcement, IP protection, and structural reforms (e.g., subsidies, state-owned enterprises).

Trump called this a “reneging” on a nearly finalized deal and responded by raising tariffs (e.g., from 10% to 25% on $200 billion worth of goods).

6.1 China’s Perspective (2019)

• The U.S. demands were too intrusive, especially demands for changes to sovereign laws.
• They wanted a more balanced deal, with tariff rollbacks included in exchange for concessions.
• The U.S. side, in their view, kept shifting goalposts.

China was reportedly even during that time - willing to buy more U.S. goods, but resisted deeper structural reforms, especially changing domestic laws and accepting unilateral U.S. enforcement mechanisms

And with tariffs on key sectors staying in place, China may think:

“Why make deeper concessions when the U.S. won’t even roll back current tariffs?”

 

6.2. Unchanged Tariff?

I think the unchanged U.S. tariffs on automobiles, pharmaceuticals, and aluminum/steel very likely played a contributing role in China’s alleged last-minute withdrawal from the trade deal. This was based on 2019 history:

During the trade negotiations, China expected that any deal would include:

• Phased tariff rollbacks, not just a halt on new tariffs
• Removal or easing of existing tariffs, especially those imposed under:
• Section 301 (general goods from China)
• Section 232 (steel and aluminum, affecting many nations including China)

But Trump’s position at the time was:

• Keep key tariffs intact as leverage
• Use compliance enforcement over time to maybe reduce tariffs later
• Exclude items like automobiles, pharmaceuticals, and metals from immediate relief

This mismatch in expectations led to a breakdown.

The excluded tariffs were on strategically sensitive on China’s side

If these tariffs remained, China may feel that the deal lacked good faith or reciprocity.

While not the only reason, the unchanged tariffs on autos, pharma, and metals were a significant sticking point that contributed to the collapse of the draft deal. China likely saw little benefit in making deeper concessions when key U.S. tariffs remained untouched, especially on sectors core to its national interests.

7.0 DID PRESIDENT TRUMP REVISITED THE KEY ELEMENTS OF 2019 US-CHINA TRADE DEAL?

The answer is almost a big “YES”. President Donald Trump is revisiting key elements of the 2019 U.S.- China trade deal especially the parts he considers strong negotiating wins as a template or leverage point for his 2025 trade stance, particularly as he prepares for a possible return to office. Here’s how :

 

Possible Risks in 2025 if President Trump Returns with 2019 Playbook

8.0  HOW GLOBAL STOCK MARKET REACT 2025 (I BELIEVE IT’S A MIRROR OF 2019)

General Market Reaction to the 2025 U.S. - China Trade Deal (Based on What I Unqualifyingly Analyze)

a. Initial Optimism

Global indices did rally on news of a truce or deal - markets often welcome de-escalation in trade tensions.

However, I’m unsure how positive did the investors respond on the recent truce:

• Did it really ease tariff threats?
• Did it really restore global supply chains?
• Did it really renew business confidence?

 Sectors That Benefit :

• Tech stocks (Apple, Nvidia, Samsung) - less risk from tariffs or component supply disruptions
• Industrial/export-heavy firms (Caterpillar, Boeing) - reliant on global trade
• Emerging markets - especially those linked to supply chains or raw materials

b. Cautious Optimism or Flatlining After Details Emerge

The deal might still lack clarity or enforceability, and I see the markets started to show sign of cooling off.

Tariffs that remain (e.g., on automobiles, pharmaceuticals, or metals) have somehow limit long-term investor enthusiasm.

Personally, the investors and I feel that the deal being more symbolic than structural.

c. Volatility Based on Political Rhetoric

Markets may react sharply to statements by US or Chinese officials, especially if:

• Talks break down again
• There’s backlash from Congress, WTO, or domestic industries
• Enforcement mechanisms are weak

Thus :

The 2025 deal mirrors earlier ones like in 2019, the market may be seeing:

• A short-term bounce
• Followed by sector-specific adjustments
• Then we’ll be seeing cautious trading until implementation details are confirmed

WHAT I REALLY THINK

What I feel (don’t quote me), the deal did happened but :

Temporary Stabilization, Not a Resolution

The agreement represents a short-term de-escalation rather than a long-term solution. Structural issues in U.S.-China economic relations remain unresolved, and both sides appear to be buying time rather than genuinely reconciling key differences.

Strategic Motivations Behind the Truce

The U.S. agreed to postpone additional tariffs to reduce pressure on domestic markets and consumers, especially ahead of elections, while China aimed to ease the economic slowdown and regain investor confidence.

Global Economic Reactions Are Cautiously Optimistic

While markets initially reacted positively, uncertainty lingers as no clear roadmap exists for addressing deep-rooted issues such as intellectual property theft, state subsidies, and technology transfer demands.

Underlying Rivalry Persists

The truce does not mark the end of U.S.-China strategic competition. Rather, it shows a tactical pause amid broader geopolitical rivalry spanning trade, technology, and global influence.

Long-Term Outlook Remains Volatile

Without meaningful and enforceable commitments, the risk of trade tensions resurfacing remains high. Future negotiations will test the political will and strategic priorities of both nations.

JOHOR - SINGAPORE SPECIAL ECONOMIC ZONE (SEZ) - It's special alright - Overview by Nik Zafri

Note and Disclaimer : This article is part of a private online recent discussion between myself and interested parties. No confidential information, such as plans, drawings, or VR simulations or the likes are being disclosed in this article. I am sharing this piece voluntarily to promote Special Economic Zones (SEZ) to professionals and firms who may be exploring opportunities in this area. Additionally, I may serve as a key speaker on the subject. Inquiries and speaking invitations from any party are welcome, subject to terms and conditions.

The Johor-Singapore Special Economic Zone (SEZ) is a proposed cross-border economic zone that aims to integrate the economies of Johor, a state in southern Malaysia, and Singapore. This initiative is meant to promote closer economic cooperation and development between the two regions, capitalizing on their proximity and complementary economic strengths. 

In 2023, total trade between Malaysia and Singapore reached US$79.6 billion. Malaysia’s exports to Singapore were US$ 31.53 billion. The main exported goods were electrical and electronic equipment (US$9.38 billion), mineral fuels, oils, distillation products (US$9.73 billion), machinery, nuclear reactors and boilers (US$2.66 billion), pearls, precious stones, metals, coins (US$1.68 billion), and plastics (US$1.09 billion). 

Meanwhile, in the same year, Malaysia’s Exports to Singapore reached US$48.09 billion, and the main exported goods were electrical and electronic equipment (US$22.20 billion), mineral fuels, oils, distillation products (US$7.82 billion), machinery, nuclear reactors and boilers (US$4.69 billion), optical, photo, technical, medical apparatus (US$1.64 billion), and pearls, precious stones, metals, coins (US$0.89 billion). 

Source : ITC Trade Map

On January 11, 2024, Minister of Economic Affairs, Rafizi Ramli and Singapore’s Trade and Industry Minister signed a Memorandum of Understanding (MoU) outlining proposed joint initiatives to develop the region. The signing was witnessed by Malaysia's Prime Minister YAB Dato' Seri Anwar Ibrahim and Singapore's Prime Minister Lee Hsien Loong.

KEY FEATURES OF SEZ

Cross-Border Integration 

The Johor-Singapore SEZ is designed to foster greater economic integration between Johor and Singapore. This includes encouraging investment, trade, and labour movement across the border.

FOCUS AREAS AND SECTORS

The SEZ is expected to target specific sectors where Johor and Singapore can complement each other.

Manufacturing and Logistics

Johor’s Iskandar Malaysia Region already focuses on these sectors, benefiting from lower land and labour costs compared to Singapore.

Electronics and Electrical (E&E) Manufacturing 

This is one of the largest manufacturing sectors in Iskandar Malaysia, involving the production of semiconductors, consumer electronics, electrical components, and home appliances. For example, companies like Panasonic and Vishay Intertechnology have set up operations in Johor, producing components like capacitors, resistors, and sensors that are exported globally.

Automotive and Aerospace Manufacturing 

Iskandar Malaysia serves as a hub for automotive parts and component manufacturers. The region produces items like engine parts, electronics, tires, and other components. Companies like Berjaya Group and Toyota Tsusho have established facilities in Johor. Aerospace component manufacturers such as Upeca Aerotech also operate in Johor, producing parts for global aerospace giants like Boeing and Airbus. 

Food and Beverage (F&B) Processing

The food processing industry in Iskandar Malaysia involves processing raw agricultural products into packaged foods and beverages for export and local markets. This includes halal food production, given Malaysia's strength in the halal industry. For example, Nestlé has a significant presence in Johor, producing products like Milo, Maggi, and Nescafé for Southeast Asia.

Petrochemical and Chemical Manufacturing 

The region is also home to several petrochemical and chemical manufacturing plants, such as those producing plastics, resins, fertilizers, and industrial chemicals. Companies like Petronas have significant operations in Johor, particularly at the Pengerang Integrated Petroleum Complex (PIPC), which focuses on petrochemical and refinery activities.

Pharmaceutical and Biotechnology Manufacturing 

Iskandar Malaysia has been growing its footprint in pharmaceuticals and biotechnology, with companies involved in the production of generic medicines, medical devices, and biotech research. Biocon, an Indian biopharmaceutical giant, has established a large facility in Johor to manufacture insulin products for global markets.

LOGISTICS OF ISKANDAR MALAYSIA

Logistics involves the transportation, warehousing, distribution, and supply chain management of goods. The region benefits from its strategic location next to Singapore, access to ports, highways, and railways, and a growing network of logistics hubs.

E-COMMERCE FULFILLMENT CENTRES

The rise of e-commerce has led to the establishment of fulfillment centers in Iskandar Malaysia, where goods are stored, packed, and shipped to customers in Malaysia, Singapore, and the broader Southeast Asian region. Companies like Lazada and Shopee have invested in logistics infrastructure in Johor to support their operations.

Singapore and Malaysia are distinguished as leading mature e-commerce markets in Southeast Asia, characterized by high internet and smartphone penetration, affluent and tech-savvy consumer bases, sophisticated logistics and payment infrastructure, and supportive government policies. The e-commerce sector in Singapore is projected to grow at a Compound Annual Growth Rate (CAGR) of 11% over the next five years, while Malaysia's market is expected to experience a 14.32% growth rate during the same period.

Source : Growthops.Asia

TECHNOLOGY, SYSTEM AND PLANNED IMPLEMENTATION

Technology and Innovation - Leveraging Singapore’s status as a tech and innovation hub.  Technology and Innovation are key drivers of growth in both Johor’s Iskandar Malaysia and Singapore. Each region leverages its unique strengths to foster technological advancements and innovation, often complementing one another in areas like digital transformation, smart cities, artificial intelligence, and green technologies.

Data Centers and Cloud Computing - Iskandar Malaysia is emerging as a hub for data centers, benefiting from its strategic location, lower operating costs, and availability of land. Companies such as Bridge Data Centres and Keppel Data Centres have established facilities in Johor to cater to growing demand from Southeast Asia. These data centers support cloud computing, data storage, and disaster recovery services, catering to regional businesses and multinational corporations.

Smart City (Urban Intelligence) Initiatives - The Iskandar Malaysia is implementing smart city with elements of Urban Intelligence initiatives to improve urban living through technology. The Smart City Iskandar Malaysia (SCIM) framework focuses on smart governance, smart economy, smart mobility, and smart environment. Examples include the use of intelligent traffic management systems, energy-efficient buildings, and smart waste management solutions.

Innovation and Research Centres - Several innovation hubs and research centres in Iskandar Malaysia focus on advanced technologies. For instance, the Crescendo-HELP International School's Innovation Center fosters research in robotics, artificial intelligence (AI), and STEM education. The University of Southampton Malaysia Campus in Johor is involved in research and development (R&D) in engineering and technology.

Green Technology and Sustainability - Iskandar Malaysia promotes sustainable development and green technology through initiatives such as the Iskandar Malaysia Low Carbon Society project, which aims to reduce carbon emissions through the adoption of renewable energy, green building practices, and sustainable transport systems. The region also hosts solar panel manufacturers and other companies focused on clean energy solutions.

Advanced Manufacturing and Automation - The region is home to advanced manufacturing plants that use automation, robotics, and the Internet of Things (IoT) to enhance productivity and reduce costs. For example, companies in sectors like electronics, automotive, and aerospace are adopting Industry 4.0 technologies, such as D&S Solution (M) Sdn Bhd, which focuses on precision engineering and automation solutions.

Smart Nation Initiative - Singapore’s Smart Nation Initiative aims to transform the city-state into a leading digital economy and smart city through the integration of technology in governance, healthcare, transportation, and urban planning. Examples include a nationwide network of sensors and smart devices for public safety, autonomous vehicle trials, and digital payment systems.

Artificial Intelligence (AI) Development - Singapore is a regional leader in AI development, with government-led initiatives such as AI Singapore driving innovation. AI Singapore works on projects ranging from natural language processing to AI-driven healthcare solutions. Companies like Grab use AI to optimize ride-hailing and food delivery services.

Fintech and Digital Banking - Singapore is a global fintech hub, fostering innovation in digital banking, blockchain, and payment systems. Startups like Revolut, Nium, and TransferWise operate in the city, and major banks such as DBS and OCBC have launched digital banking platforms and robo-advisors.

1) Collaborative R&D and Innovation

Johor can serve as an extension of Singapore’s innovation ecosystem by providing space and cost advantages for research and development (R&D) facilities. For example, joint research initiatives in areas like AI, advanced manufacturing, and biotechnology could benefit from the resources and talent pools in both regions. 

2) Cross-Border Digital Economy

The close proximity and digital connectivity between Singapore and Johor enable cross-border digital trade, e-commerce, and fintech innovation. Singaporean startups and companies can leverage Johor’s infrastructure and workforce for regional expansion.

3) Smart City Development/Urban Intelligence 

Both regions can share best practices and collaborate on smart city solutions, such as intelligent transport systems, sustainable urban planning, and energy-efficient technologies, creating a seamless cross-border smart city ecosystem.

4) Supply Chain Optimization

Manufacturing and logistics hubs in Johor can support Singapore’s technology and innovation ecosystem by providing supply chain and distribution solutions for high-tech products, enabling cost-effective and efficient regional supply chains.

5) Education and Healthcare

Johor can serve as an expansion area for Singapore's education and healthcare services.

6) Tourism

Both regions aim to enhance tourism through shared marketing and improved connectivity. This will make the SEZ more viable, there are plans for infrastructure projects that improve connectivity between Johor and Singapore. For example:

 7) The Johor Bahru-Singapore Rapid Transit System (RTS) Link

A rail link connecting Johor Bahru and Singapore, set to ease traffic congestion and promote daily commuting.

8) Enhanced Road and Port Facilities

Upgrades to current road networks and port facilities to facilitate the movement of goods and people.

9) Simplified Regulations and Incentives

As a special economic zone, the SEZ may offer unique incentives to attract investors, such as tax breaks, streamlined regulations, and ease of doing business. These incentives would be designed to attract businesses that can benefit from a cross-border operational model, leveraging the advantages of both jurisdictions.

10) Labor Market and Workforce Synergy

The SEZ will likely include policies to promote the efficient movement of labor between Johor and Singapore, such as simplified visa processes or special permits for cross-border workers. This could help both regions address labor shortages and create a more dynamic workforce.

RELATION TO ISKANDAR MALAYSIA

The Johor-Singapore SEZ concept is closely related to the Iskandar Malaysia development, which is already a significant economic growth corridor in southern Johor. Iskandar Malaysia’s focus on industrial development, logistics, property development, and international education aligns well with the objectives of the SEZ, positioning it as a key component of this larger cross-border strategy.

CURRENT STATUS

While the idea of the Johor-Singapore Special Economic Zone has been discussed and promoted in various bilateral forums, it is still largely in the conceptual stage. Key projects like the RTS link are already underway, but a comprehensive, formal agreement defining the specifics of the SEZ, such as its regulatory framework, incentives, and governance structure, has not yet been finalized.

CONCLUSION

The Johor-Singapore Special Economic Zone is a proposed initiative to create a tightly integrated cross-border economic region between Johor in Malaysia and Singapore. It aims to capitalize on their geographic proximity and economic complementarities to drive growth, enhance connectivity, and foster bilateral cooperation. While the concept is promising, its full realization depends on continued negotiations and strategic planning between both governments.