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US-Malaysia Agree Chips Plan As Biden’s Team Rebuilds Asia Ties

US Commerce Secretary Gina Raimondo says the new Indo-Pacific economic framework will not be a typical trade deal

US Secretary of Commerce Gina Raimondo
US Secretary of Commerce Gina Raimondo announced a $35-million award on Monday to a BAE Systems facility in Hampshire to make chips for fighter jets from the 'Chips for America' production and research subsidy programme. Photo: Reuters.


The US and Malaysia have agreed to jointly work to improve critical semiconductor supplies as Washington continues to rebuild bridges with Asian nations after Donald Trump’s four years in office.

The agreement comes as Malaysia seeks to tackle a shortage in semiconductor chips after supplies were disrupted due to curbs imposed to stem a surge in Covid-19 cases this year.    

The accord is part of a greater Indo-Pacific economic framework push planned by the United States, which will not be structured like a typical free trade deal its Commerce Secretary Gina Raimondo said on Thursday.


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In a teleconference call during a visit to Malaysia, Raimondo said discussions on the framework are in preliminary stages, but could involve several key areas including the digital economy, supply chain resiliency, infrastructure, export control, and clean energy.

“We absolutely do not envision this to be a traditional trade agreement, absolutely do not envision it to require Congress to be involved,” she said, adding that the US will develop the framework with allies in the months to come.

On Wednesday, Raimondo said an Indo-Pacific economic framework could be launched at the start of next year, and her Asia visit was to lay the groundwork for potential partnerships.

Critics of US strategy for the region have pointed to its lack of an economic component after former President Donald Trump withdrew in 2017 from a US-inspired trade deal, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.


Pacific Pact Withdrawal

US trade ambassador Katherine Tai, visiting Tokyo earlier this week, admitted that America needs to rebuild its relationships with its Pacific neighbours, which saw Donald Trump withdraw the States from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the successor to the Trans-Pacific Partnership (TPP).

Earlier on Thursday, the US and Malaysia said in a joint statement that both countries plan to sign an agreement by early 2022 towards improving transparency, resilience and security in the semiconductor and manufacturing sector supply chains.

Malaysia’s chip assembly industry, accounting for more than a tenth of a global trade worth over $20 billion, has warned that shortages will last at least two years.

Raimondo said both governments had a broad ranging discussion with the semiconductor industry on Thursday, including to cut out redundancy in investments and to boost supplies.


  • Reuters with additional editing by Sean O’Meara



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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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