AS trade tensions between the United States and global partners continue to escalate, the Malaysian Employers Federation (MEF) has raised the alarm over the fate of tens of thousands of local workers, warning that up to 60,000 jobs in the country’s small and medium enterprise (SME) sector may be at risk.
The warning follows a recent move by US President Donald Trump to impose a new round of reciprocal tariffs, a decision that could deal a heavy blow to Malaysia’s export-driven businesses, particularly those reliant on the American market.
MEF President Datuk Dr Syed Hussain Syed Husman said the estimate was derived from Malaysia’s SME landscape, which comprises approximately 1.2 million enterprises, representing 98% of all registered companies nationwide.
“Of that number, about 20% — or 240,000 companies — are involved in export activities,” he said. “Around 12,000 of these firms, or 5% of exporters, are directly dependent on the US market.”
With an average of 25 employees per SME, this equates to roughly 300,000 workers linked to US-bound exports.
“If demand from the US drops as a result of the new 24% reciprocal tariffs, and even 20% of these workers are laid off, the total number of affected employees could reach 60,000,” he explained in an interview with Sinar Harian.
This potential job loss paints a grim picture for a sector that forms the backbone of Malaysia’s economy. SMEs not only contribute nearly 40% of GDP but also account for two-thirds of total employment.
Dr Syed Hussain said the final impact would depend on how governments and industries respond to this unfolding crisis.
“There are still many variables in play — including domestic policy measures, export incentives, and the ability of companies to diversify into new markets such as ASEAN, China, the BRICS bloc, or member states of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),” he noted.
He further urged the Malaysian government to consider targeted recovery incentives that could ease the burden on struggling exporters and safeguard jobs.
“If the US goes ahead with implementing these 24% tariffs, we can expect demand for affected products to decline, which in turn would trigger reduced production and potential workforce downsizing,” he added.
While fears of tit-for-tat trade wars are growing, Dr Syed Hussain said ASEAN should resist any knee-jerk reaction.
“Thus far, ASEAN countries have not resorted to retaliatory measures. Instead, they are focusing on constructive dialogue and engaging in negotiations to reduce tariffs,” he said.
Malaysia is currently preparing to take on a greater role in these discussions. MEF is set to assume the Chairmanship of the ASEAN Confederation of Employers (ACE) in May 2025, and Dr Syed Hussain stressed the importance of maintaining ASEAN’s founding principle of trade facilitation.
“As we take up the ACE chairmanship, our goal is to strengthen regional collaboration and ensure ASEAN continues to be a platform that enables open trade, resilience, and mutual support,” he said.
For now, many Malaysian exporters are caught in a bind — unable to predict the next move in a turbulent geopolitical chessboard, but acutely aware that the stakes are rising. The coming months will be critical in determining whether policy interventions and diplomatic efforts can shield businesses and workers from the brunt of the fallout.
“We urge all stakeholders to act swiftly but thoughtfully,” Dr Syed Hussain concluded. “This is not just an economic issue — it’s a people issue. Jobs, livelihoods, and entire communities are at stake.”
Source: https://www.thevibes.com/articles/news/106840/us-tariff-escalation-up-to-60000-jobs-could-be-lost-in-sme-sector-warns-mef