Malaysia is expected to face a major reshuffle in the global supply chain following the implementation of new tariffs by the United States (US) announced by President Donald Trump and set to take effect on August 1.
Bank Muamalat Malaysia Chief Economist, Dr Mohd Afzanizam Abdul Rashid said the government had conducted a comprehensive scenario assessment as a preparatory measure, although the tariff policy was beyond Malaysia's control.
He stressed that pragmatic measures needed to be taken because the global supply chain was expected to continue to be reconfigured, whether tariffs were imposed or not.
On July 4, Trump announced the sending of letters to several countries with new tariff rates ranging from 10 to 70%.
Economist Prof Geoffrey Williams said global trade disruptions had the potential to affect Malaysia's exports and weaken the country's trade balance, which has shown a downward trend since August 2023.
The situation is expected to become more challenging when Trump also threatens to impose an additional 10% tariff on countries that support "anti-American" policies, including BRICS.
Meanwhile, the Ministry of Investment, Trade and Industry (MITI) stressed that Malaysia remains neutral and continues to focus on trade cooperation based on national interests.
Commenting further, Prof Yeah Kim Leng from Sunway University expects the new tariffs to give US importers a price shock, thus affecting Malaysian exports.
In an increasingly uncertain global trade environment, Malaysia needs to urgently adjust its strategy to ensure its competitiveness remains intact.
