A new round of tariffs introduced by U.S. President Donald Trump is expected to hurt Malaysia’s economy, badly. The 24% tariff on Malaysian exports could lead to as many as 50,000 job losses, according to the Malaysian International Chamber of Commerce and Industry (MICCI). Areas like Penang, Johor, and Klang Valley, where many export-related industries are based, are likely to be the most affected.
Key Sectors in the Firing Line
MICCI President Christina Tee warned that several industries will be at risk, especially those already struggling with rising costs and global uncertainty.
“This is one of the most consequential trade developments in recent years,” Tee said.
“The 24% tariffs will have far-reaching implications beyond the electronics manufacturing services (EMS) sector, affecting palm oil, medical devices, automotive parts, textiles and more.”
She added that the impact will be particularly hard on small and medium-sized enterprises (SMEs), many of which rely heavily on exports to the U.S. market. These businesses may be forced to cancel contracts, restructure their operations, or move production abroad.
Why This Hits Malaysia Hard
Malaysia’s economy is deeply connected to global trade. Tee noted that over 65% of the country’s GDP is trade-dependent, making Malaysia especially vulnerable to external shocks like this.
“With over 65 per cent of our gross domestic product tied to trade, Malaysia’s economy is extremely vulnerable to such shocks,” she said.
“That alone could force businesses to reconsider contracts, restructure operations, or even shift production abroad.”
In other words, if Malaysian goods become too expensive for U.S. buyers, businesses may lose clients, lay off workers, or shut down completely.
A Five-Point Strategy to Fight Back
To protect the economy and save jobs, MICCI has proposed a five-point strategy. This includes:
- Tariff Relief Scheme – A government-supported plan to soften the financial blow for exporters
- Faster Trade Agreements – Speeding up deals with other countries to find new markets
- Special Taskforces – Teams dedicated to solving trade code issues and improving ties with the U.S.
- Exporter Resilience Fund – A financial safety net for companies affected by the tariffs
- Tariff Mitigation Council – A national-level body co-led by the Ministry of Investment, Trade and Industry and MICCI to coordinate responses and strategies
Malaysia Also Pushing for Regional Solutions
As chair of ASEAN this year, Malaysia is also working with its Southeast Asian neighbours to present a unified response to the tariffs.
Prime Minister Anwar Ibrahim has called for regional cooperation to keep supply chains strong and ensure ASEAN has a seat at the negotiating table. Meanwhile, Communications Minister Fahmi Fadzil has confirmed that Malaysia will send a diplomatic team to the U.S. to discuss the tariffs.
Some Hope in a Diversified Economy
Despite the risks, there is some optimism. Bank Negara Malaysia Governor Abdul Rasheed Ghaffour reminded the public that Malaysia’s economy is diverse, with the services sector making up 60% of GDP. This could help cushion the blow.
Still, he acknowledged that the tariffs will have an impact, and that structural reforms and smart economic planning will be needed to weather the storm.
Tariffs: Major Challenge
Trump’s tariffs are a major challenge for Malaysia’s export-driven economy.
With tens of thousands of jobs on the line and key industries at risk, both the government and MICCI are taking urgent steps. They’re calling for quick action, regional cooperation, and long-term resilience, because when your economy is built on trade, staying competitive isn’t just a strategy. It’s survival.
Source: here
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