Kuala Lumpur: According to an analysis by the KSI Strategic Institute for Asia Pacific and the Economic Club of Kuala, Malaysia faces significant opportunities under the United States presidency, particularly in attracting foreign direct investment (FDI) and enhancing export potential. Ready to seize. Lumpur (Eckl).
With Trump planning to impose 10% tariffs on Chinese goods from Feb. 1, companies seeking to relocate production lines to other countries may turn to Malaysia, KSI and EKL said in a statement.
“For Malaysia, a major exporter of electronic products and components to the US, such measures could impact export competitiveness. “However, as companies look to diversify supply chains away from China, Malaysia’s semiconductor industry, which accounts for about 13% of the global market in chip packaging and testing, could attract increased investment,” he said.
According to the statement, the intensification of US-China trade tensions under Trump’s policies is expected to accelerate the “China plus one” strategy, where companies diversify their manufacturing bases outside China.
“Malaysia stands to benefit from this shift, potentially seeing an increase in FDI, particularly in the electronics, machinery and palm oil sectors. This inflow could contribute an additional RM19.7 billion to Malaysia’s GDP over four years, equivalent to a one per cent increase,” it said.
The statement also highlighted the potential impact of Trump’s energy policies, noting that his support for traditional energy sectors, including fossil fuels, could increase US production and exports. “For Malaysia, a net oil exporter, this could result in lower global energy prices, impacting revenues from mineral fuel exports,” it warned.
However, that said, Malaysian petroleum companies may find new opportunities if the US reduces renewable energy incentives, which could result in increased demand for conventional energy sources.
KSI and EKL said Trump’s return to the White House could also pose challenges that require vigilance and proactive policy responses to safeguard economic stability. He cited Malaysia’s domestic strengths, which include a diversified economy, strategic global position, strong infrastructure, skilled workforce and strong financial systems.
“Policymakers should capitalize on these strengths by diversifying trade partnerships, attracting FDI, enhancing digitalization and building resilience in key sectors. “By taking proactive measures, Malaysia can mitigate the potential impacts of Trump’s policies and maintain stable economic growth,” he said.
KSI and EKL said the combination of US tariffs and China’s domestic economic challenges are expected to weigh on Malaysia’s economy, particularly in the export-driven manufacturing and electrical and electronics sectors.
Despite the challenges, Malaysia’s strategic position and economic fundamentals provide a buffer against the worst impacts, he concluded. – Bernama
