The Malaysian International Chamber of Commerce and Industry (MICCI) has expressed deep concern over the recent imposition of 24% reciprocal tariffs on Malaysian exports by the United States, warning that the move could significantly disrupt the country’s export-driven economy and lead to widespread job losses if not addressed promptly.
President of MICCI, Christina Tee, stated, “This is one of the most consequential trade
developments in recent years. The 24% tariffs will have far-reaching implications beyond the EMS sector, affecting palm oil, medical devices, automotive parts, textiles, and more.
“With over 65% of our GDP tied to trade, Malaysia’s economy is extremely vulnerable to such shocks. These tariffs risk rendering our exports uncompetitive in the U.S., forcing businesses to reconsider contracts, restructure operations, or even shift production abroad.
“Many are already operating under pressure from rising input costs, and this adds yet another layer of strain,” Tee added. MICCI estimates that, if left unmitigated, the tariff shock could result in up to 50,000 direct and indirect job losses, particularly across Penang, Johor, and the Klang Valley, as well as stagnation in wage growth.
Key risk sectors include electronics, gloves, and automotive parts, where export-linked production volumes may contract significantly, particularly impacting
SMEs.
While companies have begun responding with measures such as re-shoring partial production, reclassifying HS codes, renegotiating contracts, and automating operations, MICCI asserts that a whole-of-government counterstrategy is urgently needed.
Tee said, “Malaysia cannot afford to adopt a wait-and-see approach while other regional economies move quickly to negotiate relief or exemptions. As a nation, we must act swiftly and collaboratively to protect our industries, jobs, and global competitiveness.”
To this end, MICCI has formally called for the establishment of a Tariff Mitigation Council, co-chaired by the Ministry of Investment, Trade and Industry (MITI) and MICCI, to lead national-level coordination. The chamber also recommends the formation of bilateral working groups under the Malaysia–U.S. Trade and Investment Framework Agreement (TIFA), as well as access to technical advisory services for affected exporters.
As part of its proposed five-point national response strategy, MICCI has outlined some key
measures, including a Tariff Cushioning Scheme, Trade Agreement Acceleration, an HS Code Defense Taskforce, a U.S. Diplomacy Taskforce, and an Exporter Resilience Fund.
MICCI has also urged employers to take proactive steps including reassessing supply chains, expanding into new markets, reviewing trade documentation and compliance, and leveraging regional collaborations through ASEAN.
While some domestic-facing firms may pass on higher costs to consumers, MICCI notes that most exporters — particularly those in globally competitive sectors — will be unable to do so due to pricing pressure, leaving them to shoulder the burden internally or restructure contracts to survive.
Thus, MICCI urged employers to adapt to the new development by revalidating supply
chains, diversifying customer bases, joining industry advocacy movements, revisiting contracts and classifications, automating and upskilling, and leveraging ASEAN strength.
“This is a pivotal moment for Malaysia. We must respond with urgency and unity to safeguard our competitiveness and position in the global value chain. MICCI stands ready to collaborate with the government and industry players to develop practical, forward-looking solutions,” Tee concluded.
Source: https://sme.asia/micci-urges-swift-action-as-us-slaps-24-tariffs-on-malaysian-exports/