Image credit: Malay Mail
KUALA LUMPUR (July 17): The US’ renewed tariff threat may drag on export volume, disrupt supply chains, and undermine investor confidence, Malaysia’s biggest coalition of business groups warned on Thursday.
The initial tariff flip-flop in April has already sent ripples through Malaysia’s key sectors such as electrical and electronics, palm oil, and machinery, said National Chamber of Commerce and Industry of Malaysia president Datuk Seri N Gobalakrishnan.
“We remain hopeful that a reduction to below 20% can be achieved, especially with support from Asean allies and trade diplomacy,” Gobalakrishnan said in his opening remarks at the National Economic Forum 2025.
Malaysia was blindsided on Tuesday when US President Donald Trump announced a 25% import tariff on all Malaysian goods. Trump left the door open to negotiations ahead of a new deadline on Aug 1, and Malaysia has said it will continue to engage the US.
On April 2, Trump announced in an executive order a 24% tariff on goods imported from Malaysia in a sweeping trade policy hitting all US trading partners, before backing down days later with a three-month pause.
In addition to international trade headwinds, Gobalakrishnan said on Thursday that domestic economic pressures are mounting across the board, weighing heavily on industry, small businesses, and households alike.
Despite macroeconomic indicators pointing to overall stability, there is a growing disconnect on the ground — where many small and medium enterprises (SMEs), industrial players, and consumers feel they are being left behind, he flagged.
Apart from tariffs, key concerns include the recent expansion of the sales and service tax as well as an increase in electricity tariffs, which are placing SMEs under mounting financial strain, with profit margins shrinking and cash flows tightening.
Larger manufacturers, meanwhile, are also grappling with rising operational costs that threaten their competitiveness both regionally and globally.
“This compounding effect on both consumers and producers is fuelling growing frustration and economic anxiety on the ground,” he added.
Source: https://theedgemalaysia.com/node/763009