KUCHING (April 10): The Dayak Chamber of Commerce and Industry (DCCI) is closely monitoring the impact of newly proposed and implemented United States (US) tariffs on a wide range of imports, particularly those originating from Malaysia.
In a statement today, DCCI emphasised that the US remains a crucial trading partner for both Malaysia and Sarawak, and the latest trade developments pose significant challenges—but also open the door to new opportunities for the local business community.
“In this regard, the state government should also be exploring alternative trade opportunities for Sarawak’s SME (small and medium enterprise)-driven economy along the way,” the statement read.
On the broader national front, DCCI cited Bank Negara’s warning that a 24-per cent tariff on Malaysian exports to the US could put pressure on the economy.
However, Malaysia’s diversified economic base, led by the services sector, which contributes nearly 60 per cent to the GDP, offers a cushion against these external shocks.
“Ongoing structural reforms, sound fiscal discipline, and a stable ringgit will be critical in mitigating adverse effects,” added the chamber.
DCCI highlighted that SMEs remain the backbone of Malaysia’s economy, accounting for 97 per cent of business establishments this year, contributing 38 per cent to GDP, 66 per cent to employment, and 17 per cent of total exports.
“In Sarawak, many SMEs are deeply embedded in key sectors such as timber, agro processing, tourism, handicrafts, and retail—industries that are particularly vulnerable to fluctuations in global trade dynamics,” it noted.
According to DCCI, US tariff hikes could squeeze profit margins for Sarawak’s export-reliant businesses—especially in timber and furniture—reduce their competitiveness in the American market, disrupt supply chains, extend trade logistics, and increase financial stress for micro and small-scale exporters.
“The timber sector, a long-standing pillar of Sarawak’s economy, is already feeling the pinch,” DCCI pointed out.
The Timber Exporters’ Association of Malaysia (TEAM) has warned that the additional 24 per cent reciprocal tariff from the US on timber products will severely impact the industry by slashing margins and undermining global competitiveness.
Exporters in some states, such as Perak, have reportedly begun withdrawing from the US market entirely.
Despite this, DCCI believes the disruption could give rise to new opportunities.
“According to the Malaysia Semiconductor Industry Association, the US tariff hike on Chinese semiconductors may benefit Malaysia by redirecting investment and demand to alternative supply chain hubs,” it said.
With its growing presence in the electrical, electronics, and high-tech manufacturing sectors, Malaysia is well-positioned to attract fresh foreign investment and global partnerships.
“Can Sarawak diversify beyond the US market? Absolutely—and it must.
“In a rapidly evolving global trade environment, dependence on any single market increases risk. Thus, Sarawak and Malaysia must actively pursue diversification strategies to tap into emerging and underutilised markets with strong growth potential,” DCCI said.
DCCI also highlighted some possible alternative global markets for trade diversification such as the Asean markets.
With over 600 million consumers and deepening regional integration under the Asean Free Trade Area (AFTA), markets such as Indonesia, Thailand, Vietnam, and the Philippines offer growing demand for Sarawak’s timber, palm oil, and halal products.
Secondly, China—Malaysia’s top trading partner—remains a vital destination for energy resources, food products, and timber-based furniture from Sarawak.
India, which has a growing middle class and demand for consumer goods and agro-based products, also presents a promising market for Sarawak’s exporters, said the chamber.
Middle East and North Africa (MENA) have strong demand for halal-certified goods, construction materials, and electronics presents a clear growth avenue for Sarawak SMEs.
The European Union’s (EU) sustainability-driven market opens doors for certified timber, organic goods, and renewable energy technologies.
Furthermore, Africa’s rapid urbanisation and infrastructure development across the continent provide long-term opportunities for timber, processed food, and essential goods.
To facilitate this shift, DCCI called on policymakers, trade agencies, and financial institutions to enhance capacity-building programmes for SMEs, provide digital trade tools to ease entry into new markets, and expand access to financing, export guarantees, and risk mitigation instruments.
Other key recommendations include increasing Sarawak’s participation in global trade missions and expos, boosting B2B networking, and strengthening trade intelligence and promotion offices in non-traditional markets.
DCCI also advocates for fair, inclusive, and transparent global trade policies.
“The imposition of the US tariffs serves as a wake-up call, and highlights the urgent need for Malaysia, particularly Sarawak, to rethink and realign its trade strategy.
“Diversification is no longer a luxury; it is a necessity for survival and sustainable growth,” it said.
By embracing emerging markets, investing in value-added industries, and integrating more deeply into global supply chains, DCCI is confident that Sarawak’s businesses can become more resilient, adaptable, and globally competitive.
It reaffirmed its commitment to empowering Dayak entrepreneurs and supporting the wider SME community in navigating this evolving global trade landscape.
Source: https://www.theborneopost.com/2025/04/10/dcci-us-tariffs-a-wake-up-call-for-sarawaks-trade-strategy/