KUALA LUMPUR: Malaysia's economic growth is expected to face minimal impact as long as the US does not impose direct tariffs on the country, economists said.
They said Malaysia remains on track to meet its gross domestic product (GDP) growth target of 4.5-5.5 per cent, with tariffs being the primary potential risk.
However, the country is currently in a solid position, they added.
"As long as the US did not impose tariffs directly to Malaysia, the impact will be minimal but it remains to be seen if any US or Chinese companies operating in Malaysia will be affected by the policy," Putra Business School economic analyst Associate Prof Dr Ahmed Razman Abdul Latiff said.
Nusantara Academy for Strategic Research senior fellow Dr. Azmi Hassan said US President Donald Trump viewed tariffs based on trade imbalances.
Although Malaysia has a trade surplus with the US, it is not substantial enough to attract significant attention, he added.
Ahmed Razman and Azmi were commenting on Economy Minister Datuk Seri Rafizi Ramli's remarks that Malaysia is on course to achieve its 2025 GDP growth target despite the challenges posed by the tariff war.
Rafizi said the trade war is likely to become a permanent aspect of the global economy, requiring Malaysia to adapt to the adjustments and volatility it brings.
He added that the market will eventually absorb and price in these factors, ultimately shifting focus back to the value proposition that Malaysia's economy offers to the world.
Azmi said to avoid being targeted, Malaysia should maintain a low profile and avoid actions that could attract scrutiny from Trump.
"However, the challenge lies in Trump's tendency to view trade imbalances on a regional scale.
"Asean, as a collective, has a substantial trade surplus with the US, and if Trump decides to impose tariffs, he may target the region as a whole - similar to his approach with the European Union (EU)," he told Business Times.
Azmi said Malaysia is currently well-positioned, as the country has no major issues with the US.
"As the Asean chairman, we hold influence over the region's alignment, whether towards neutrality, the US or China. This strategic role could help us avoid becoming entangled in a tariff war," he added.
Azmi said a tariff war can be beneficial to Malaysia as long as our products are not targeted.
"Tariffs on countries like Canada, Mexico, China, or the EU could make Malaysian goods more competitive and affordable in the US market," he added.
Source: https://www.nst.com.my/business/economy/2025/02/1171133/malaysia-be-minimally-impacted-trade-war