The Small and Medium Enterprises Association Malaysia has expressed profound concern over the United States government’s decision to impose a 25% tariff on Malaysian exports, effective August 1, 2025. Describing the measure as “the equivalent of an economic earthquake” for export-oriented SMEs, the association warned that the tariff poses a severe threat to Malaysia’s trade competitiveness and industrial base.
“For SMEs who are significantly exposed to the US market, this is the equivalent of an economic earthquake,” stated SAMENTA. The association highlighted that these export-oriented SMEs form the “backbone of our manufacturing ecosystem.”
While acknowledging the government’s continued pursuit of a “balanced and mutually beneficial” trade resolution with Washington, SAMENTA emphasized the urgent need for coordinated action to cushion the impact on affected SMEs.
The association calls on the government to expedite the roll-out of previously announced targeted support measures. These include:
- A RM1 billion increase in Syarikat Jaminan Pembiayaan Perniagaan (SJPP) guarantees.
- RM500 million in soft loans via development financial institutions.
- A RM50 million boost to the Malaysia External Trade Development Corporation (MATRADE).
It stressed that these initiatives must be delivered quickly and with minimal red tape to ensure timely support for businesses.
Crucially, it urged that these relief measures be extended beyond export-oriented businesses to domestic, non-exporting SMEs. The association anticipates that the “tailwinds from subdued exports and weaker domestic demand will affect the services sector in equal intensity.”
To further alleviate pressure on SMEs, SAMENTA called on the government to pause all new and planned cost increases, including the proposed rationalization of petrol subsidies and incremental fees proposed by various agencies and local councils.
Recognising persistent labor shortages as a critical challenge, particularly in the services sector, SAMENTA urged the government to urgently review and ease restrictions on the hiring of foreign workers in sectors such as food services, tourism, and logistics. This is seen as vital for supporting service-based SMEs to absorb economic slack and maintain overall economic resilience as export momentum faces headwinds.
SMEs also used the opportunity to highlight longstanding structural fragilities within Malaysia’s SME ecosystem. “Malaysia’s headline economic growth often masks deeper structural weaknesses within the SME sector,” the statement read. The association noted that while the country registers macro-level gains, many SMEs remain “trapped in low-margin, low-scale operations,” squeezed by rising costs, regulatory pressures, and now, geopolitical shocks.
Source: https://www.businesstoday.com.my/2025/07/09/export-oriented-smes-shocked-by-25-tariff-urges-govt-to-act-immediately/