Petaling Jaya: US President Donald Trump has disregarded the basic principles of international trade talks by signing an executive order and launching a comprehensive global tariff rule.
Former International Business and Industry Minister Tan Shri Rafidah Aziz said that Trump has deviated from bilateral, plurallal (such as a block with ASEAN) and the concept and emotion of multilateral dialogues, especially under the World Trade Organization.
Rafida said that Trump has used trade deficit as the basis of action between the United States and other countries, a step that has never been the foundation for traditionally trade talks.
“The conversation has generally focused on major products for countries involved. By focusing on losses, Trump has reduced the very foundation of trade discussions,” he said. Sunbiz,
Rafidah warned that foreign companies working in Malaysia may start re -assuring their long -term strategies. He said, “It is not easy to move the operation associated with complex and expensive equipment – these are not ‘mobile’ operations,” he said.
Rafida said that the government should start joining with the affected companies how, and to what extent, they are affected. “Then Malaysia can implement measures that will encourage them to operate here.”
The newly launched “mutual tariff” policy will apply a standard 10% fee on all imported goods to the US, complementing by additional levy that matches tariffs of other nations on US products. There is a lot of variation in rates by the country, 34%of additional duties are being faced with China, followed by Indonesia 32%, India 26%, Malaysia 24%and European Union 20%.
Prof. Datuk Chin You Sin, Chairman of the Malaysia Strategy Research Center, said it would affect the export of electrical and electronic products to the US, giving a slow economic growth to Malaysia. “The Malaysian government will need to interact with the US government to get a better tariff.”
Meanwhile, he said, Malaysia will have to search for other markets such as South America, Middle East and African countries, so that exports can be diversified so that the US market could not be really trusted so much.
“China is our biggest trading partner, we have to continuously upgrade our ‘comfortable’ relations with China so that we can increase our exports in that country. China will be expected to achieve its 5% economic growth this year. China will contribute 30% of its economic growth all over the world and will become the engine of development at globally,” Chin said.
Economist Dr. Jeffri Williams warned that the impact of the US tariff hike could be important, saying that if the effect is prolonged, Malaysia’s GDP growth may be dragged to the bottom of the government’s forecast this year.
“America is the second largest single export market in Malaysia, and about half of those exports is in the electrical and electronics sector, which can be the most difficult,” he said that he said that Sunbiz,
However, Williams said that foreign direct investment (FDI) could remain flexible.
“Tariffs in Malaysia are already lower than other Asian countries, so the situation may also be positive for FDI.
“But the government should not retaliate with high tariffs on American products. Instead, its purpose should reduce business restrictions and interact on low tariffs,” he said.
Williams warned that a comprehensive trade war could explode if the European Union and China responded with an anti -anti -retardation tariff.
He said, “This will be destructive. For now, I believe it is just a conversation stance. The best strategy for all countries is to reduce tariffs and business obstacles, starting a new era of free trade,” he said.
The Ministry of Investment, Trade and Industries (MITI) said in a statement yesterday that the agency looks seriously and is actively attached to the US authorities to seek solutions that will maintain free and fair trade.
Malaysia is not considering retaliation, saying that the National Jioconomic Command Center, which is recently approved by the cabinet, will evaluate the impact of the US declaration on Wednesday and consider a comprehensive and multi -level strategy to reduce the impacts of these tariffs on domestic economy and industries.
According to the US Bureau of Economic Analysis, Malaysia is ranked 15th in the US list in 2024 with a US $ 24.8 billion trade surplus. Despite the trade deficit in goods, the US enjoys a business surplus in services with Malaysia.
“We admit that Trump’s tariff hike is an important challenge for global business mobility.
“Honoring such sovereign decisions, Malaysia strongly believes in creative connections for mutually beneficial economic relations. Miti is committed to maintaining Malaysia’s economic interests and maintaining strong business relations with America,” the ministry said in a statement.
To reduce the tariff effect, Malaysia is expanding export markets by giving priority to high-development areas and taking advantage of existing free trade agreements, including a comprehensive and progressive agreement, including a comprehensive and progressive agreement for the trans-pacific partnership and regional comprehensive economic partnership.
