Malaysia, a majority Muslim nation of 31 million people, is a partner in numerous U.S. security and economic initiatives in Southeast Asia. Malaysian statements along these lines have moderated in recent years, especially under Prime Minister Najib. The United States' withdrawal from the TPP agreement, and other actions taken by the Trump Administration, such as seeking to block arrivals to the United States from select Muslim nations, has created uncertainty in Malaysia about the United States' approach and commitment to the region, and has contributed to perceptions that the U.S. may turn inward or may become anti-Islamic. Domestic Politics

Malaysia has displayed a high degree of political stability since it gained independence in 1957 despite strong political divides among its population. Political coalitions led by the United Malays National Organization (UMNO), the country's dominant political party, have ruled Malaysia without interruption since independence. In the decades since, the question of the NEP's bumiputra preferences (i.e., favoring ethnic Malays and other indigenous groups), and more broadly of ethnic identity, has become one of the defining issues in Malaysian politics. Human rights groups have criticized the measures as overly restrictive. The position of opposition leader Anwar Ibrahim is of particular sensitivity in Malaysia, and in U.S.-Malaysia relations. U.S.-Malaysia Relations

Bilateral ties between the United States and Malaysia have been both highly cooperative and publicly contentious. Malaysia is a strong partner in many U.S. security and economic initiatives, but domestic Malaysian sensitivities, particularly regarding the nation's identity in the Muslim world, have constrained Malaysian leaders from undertaking high-profile partnerships with the United States. The State Department upgraded Malaysia's ranking in its Trafficking in Persons (TIP) Report from Tier 3 (the worst ranking) in 2014 to Tier 2 Watch List in 2015, sparking a controversy. Critics of the State Department's decision, including the more than 175 Members of Congress who signed letters to the Secretary of State, allege that the State Department overlooked evidence that the Malaysian government has failed to improve its human trafficking problems. The U.S. and Malaysian defense establishments have built ties through frequent military exercises, combined training, ship visits, and military education exchanges. In 2016, Malaysia was the 24 th -largest market for U.S. goods exports and the 14 th -largest supplier of U.S. goods imports. Trade Agreements

Malaysia had worked with the United States and other nations since 2010 on the proposed Trans-Pacific Partnership (TPP) free trade agreement (FTA). The TPP text included enforceable commitments on a range of trade and investment issues from tariff and nontariff barriers to labor and environmental standards. Neither country publicly has expressed interest to date in returning to bilateral FTA negotiations, but there may be interest in Malaysia in some type of economic dialogue such as a Trade and Investment Framework Agreement (TIFA). RCEP does not include the United States. South China Sea Maritime Disputes

Malaysia is one of four Southeast Asian nations with maritime territorial disputes with China (the others are Brunei, the Philippines, and Vietnam). Over the past decade, Malaysia regularly has sought to foster more cooperation among Southeast Asian claimants in efforts to resolve their own disputes and to bolster their claims in disputes with China. Security Cooperation

The Malaysian military participates in a variety of cooperative security activities on a bilateral and multilateral basis with partners from Southeast Asia and outside the region. Within Southeast Asia, Malaysia has played an active role as a mediator in conflicts between rebel Muslim groups and the central government in both Thailand and in the Philippines.
Malaysia, an ethnically diverse majority Muslim nation in Southeast Asia, has long been a partner in U.S. security and economic initiatives in the region, although political sensitivities in Malaysia have constrained both sides from forging deeper ties. Bilateral relations have improved over the past decade. Prime Minister Najib Razak, who came to power in 2009, made relations with the United States a priority early in his administration. More recently he has moved to deepen trade and economic ties with China. Congress has shown interest in a variety of issues in U.S.-Malaysia relations over the years, especially regarding trade, counterterror and security cooperation, human rights, the environment, and Malaysia's external relations.
Malaysia is considered a middle-income country that is relatively prosperous when compared to other Southeast Asian countries. The United States and Malaysia are major trade and investment partners. In 2016, Malaysia was the 24th-largest market for U.S. exports and the 14th-largest supplier of U.S. imports. The two countries negotiated and signed the Trans-Pacific Partnership (TPP) free trade agreement (FTA), which would have removed tariff and nontariff barriers to trade between the United States, Malaysia, and the other 10 participants. President Trump withdrew from the pact in January, stating an intent to negotiate future FTAs bilaterally, potentially with TPP partners. To date, there appears to have been little discussion of resuming bilateral U.S.-Malaysia FTA negotiations, but there may be interest in Malaysia in some type of economic dialogue with the United States such as a Trade and Investment Framework Agreement (TIFA). Malaysia is also seeking to develop deeper regional trade ties through the Regional Comprehensive Economic Partnership (RCEP), which does not include the United States.
Malaysia has enjoyed considerable political stability since it gained independence in 1957 despite potential cleavages within its multiethnic and multireligious social fabric. Political coalitions led by the United Malays National Organization (UMNO), the country's dominant political party, have ruled Malaysia without interruption since independence. UMNO is a staunch proponent of economic and social preferences for ethnic Malays and other indigenous groups, collectively known as bumiputra. It has supported a wide-ranging economic program known as the New Economic Policy (NEP), which attempts to address socio-economic disparities by privileging bumiputra in government contracts, education, and government hiring. Malaysia has also enjoyed broad success in achieving higher income levels for its citizens since independence.
The United States occasionally has criticized the Malaysian government for its weak human rights protections, its record on combatting human trafficking, constraints on press freedom, and prosecution of opposition political leaders like Anwar Ibrahim. The U.S. State Department upgraded Malaysia's ranking in its Trafficking in Persons (TIP) Report from Tier 3 (the worst ranking) in 2014 to Tier 2 Watch List in 2015, sparking a controversy. Many Members of Congress questioned the improved ranking and asserted that the State Department had overlooked serious human trafficking problems in order to facilitate approval of the TPP.
Malaysia is actively engaged in diplomacy on numerous regional and global issues. Efforts to promote moderate Islam and marginalize religious extremism have been a major part of Malaysian diplomacy, including acting as a mediator in conflicts between Muslim separatist groups and the central government in both the Philippines and Thailand. Malaysia maintains good relations with its neighbors and has promoted cooperation among the 10 countries in the Association of Southeast Asian Nations (ASEAN). Malaysia is one of several Southeast Asian countries with maritime and territorial claims in the South China Sea, although it has assumed a relatively low profile in those disputes. U.S.-Malaysia security cooperation includes counter-terrorism activities, numerous military exercises, ship visits, and military education exchanges.