KUALA LUMPUR: The Malaysian International Chamber of Commerce and Industry (MICCI) has warned that the 24% US tariff on Malaysian exports could disrupt the economy and cause widespread job losses if not addressed swiftly.
MICCI president Christina Tee said that the 24% tariffs imposed by the US would be one of the most consequential trade developments in recent years.
She noted that the tariffs would have far-reaching implications, impacting not only the EMS sector but also industries such as palm oil, medical devices, automotive parts, textiles, and more.
“With over 65% of our GDP tied to trade, Malaysia’s economy is extremely vulnerable to such shocks. These tariffs risk rendering our exports uncompetitive in the U.S., forcing businesses to reconsider contracts, restructure operations, or even shift production abroad. Many are already operating under pressure from rising input costs, and this adds yet another layer of strain,” Tee said in a statement.
“MICCI estimates that, if left unmitigated, the tariff shock could result in up to 50,000 direct and indirect job losses, particularly across Penang, Johor, and the Klang Valley, as well as stagnation in wage growth.
“Key risk sectors include electronics, gloves, and automotive parts, where export-linked production volumes may contract significantly, particularly impacting SMEs,” she added.
MICCI said that while companies are taking actions like bringing some production back home, changing HS classifications, renegotiating contracts, and automating a full government response is urgently needed.
To that end, MICCI has formally called for the establishment of a Tariff Mitigation Council, co-chaired by the Ministry of Investment, Trade and Industry (MITI) and MICCI, to lead national-level coordination.
The Chamber also recommends the formation of bilateral working groups under the Malaysia–U.S. Trade and Investment Framework Agreement (TIFA), as well as access to technical advisory services for affected exporters.
MICCI has proposed a five-point national strategy, including a Tariff Cushioning Scheme, faster trade agreements, a taskforce to defend HS codes, a U.S. Diplomacy Taskforce, and an Exporter Resilience Fund.
It has also encouraged employers to reassess supply chains, explore new markets, review trade documents and compliance, and collaborate within Asean.
While some domestic-facing firms may pass on higher costs to consumers, MICCI notes that most exporters — particularly those in globally competitive sectors — will be unable to do so due to pricing pressure, leaving them to shoulder the burden internally or restructure contracts to survive.
Finally, MICCI offered advice to employers, urging them to adapt now by revalidating supply chains, diversifying customer bases, joining industry advocacy movements, revisiting contracts and classifications, automating and upskilling, and leveraging Asean strength.
