US-China trade tensions will create 'domino effect'

Trade tensions between the United States and China will create a "domino effect" and prompt other countries to turn protectionist, Malaysian Prime Minister Mahathir Mohamad said on Tuesday.

Speaking at the Association of South East Asian Nations (ASEAN) Business and Investment Summit in Singapore, Mahathir said other developed countries will follow the footsteps of the United States and China by imposing protectionist measures against developing countries, like ASEAN member states.

"The trade tension between the two world powers is bound to create a domino effect that will affect trade reactions and will be a reason for other developed countries to adopt protective measures against developing countries, including the ASEAN countries," Mahathir said.

"This is not the time to close our doors by invoking trade protectionism measures," he added.

Mohamad also said on that U.S. prosecutors had promised to help return money that Goldman Sachs charged for its dealings with troubled Malaysian state fund 1MDB.

The U.S. investment bank has been under scrutiny for its role in helping raise funds through bond offerings for 1Malaysia Development Bhd (1MDB), which is the subject of corruption and money-laundering investigations in at least six countries.

The U.S. Department of Justice has said about $4.5 billion was misappropriated from 1MDB, including some money that Goldman helped raise, by high-level officials of the fund and their associates from 2009 through 2014. U.S. prosecutors filed criminal charges against two former Goldman Sachs bankers earlier this month.

Asked if he had officially requested the U.S. DOJ to help return money that Goldman charged for its dealings with 1MDB, Mahathir said:

"It takes a little bit of time but they (DOJ) have promised that they will give back the money." He was speaking on the sidelines of a speech he delivered in Singapore.

Bankers at Goldman Sachs Group "cheated" Malaysia in dealings with state fund 1MDB, Mahathir said in an interview with U.S. news channel CNBC aired earlier on Tuesda