US-China trade war could reduce Malaysia's exports by 2.7 percentage pts

In China, Trump faces a rising superpower with the economic might to hold its own.

KUALA LUMPUR: The on-going US-China trade war, if it intensifies further, could reduce Malaysia's exports by up to 2.7 percentage points under a worst-case scenario, impact export-oriented industries and reduce GDP growth.

Bank Negara Malaysia said on Friday the trade protectionism measures implemented since the beginning of this year are expected to weigh down on gross exports by 0.6 percentage point to one percentage point. 

“This mainly reflects the lower final demand from China, the US and the EU, which account for 38.4% of Malaysia’s final export demand,” it said. 

However, if trade tensions intensify further, the downside risk to export growth will be more severe.

“In the event that both downside risks materialise, the total impact to Malaysia’s exports growth could be a reduction of as much as 1.8 percentage points to 2.7 percentage points,” it cautioned.