The Trump administration has added “poison pill” termination clauses to trade pacts with south-east Asian countries, creating a new diplomatic weapon in Washington’s strategic competition with China.
The clauses, embedded in two new deals signed with Malaysia and Cambodia last week, threaten to end the agreements if either country signs a rival pact that jeopardises “essential US interests” or “poses a material threat” to US security.
Trade experts say the highly unusual and sweeping clauses amount to a “loyalty test” for smaller countries that also have close trading relationships with China, and had the potential to reshape future US trade negotiations in south-east Asia and beyond.
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