The decision by the United States (US) to impose a 25% tariff on Malaysian exports on Tuesday is expected to affect bilateral relations and destabilize the supply chain between the two countries.
The unilateral move has sparked concerns among industry players and economic analysts, who described it as the beginning of long-term trade tensions if the government does not take strategic action.
Economist Samirul Ariff Othman explained that Malaysia is currently still adopting a diplomatic approach, but any additional pressure could force the government to reassess its stance on foreign policy and trade.
Several industry players also expressed concerns that the tariffs risk disrupting the continuity of export operations, especially for the small and medium-sized manufacturing sector.
Federation of Malaysian Manufacturers (FMM) President Tan Sri Soh Thian Lai stressed that despite the exemptions given to strategic exports such as semiconductors, the industry's support ecosystem including spare parts, services and machinery is still vulnerable to negative impacts.
Meanwhile, the Institute for Democracy and Economic Affairs (Ideas) stated that the bilateral negotiation approach was insufficient and called for stronger regional cooperation through ASEAN to reject the US divide and rule strategy.
Malaysia was advised not to get caught up in retaliation or geopolitical pressure, but instead continue to expand mutually beneficial trade cooperation with other trading partners.
