KUALA LUMPUR: The US's announcement of the revised tariff rate for Malaysia - higher than before trade negotiations had begun - came as a negative surprise to investors on Tuesday.
The benchmark FBM KLCI extended its fall by 7.85 points to 1,529.69.
In the first batch of letters sent out to trade partners, the Trump administration raised the tariff rate on Malaysian goods entering the US by one percentage point - from an initial 24% in April when the "reciprocal tariffs" were first announced - to 25%.
Jitters over the tariff rates had already begun yesterday, facilitating the sharp retreat on the local bourse, as Trump warned that countries associated with BRICS may see an additional 10% imposed on their exports.
According to TA Securities, there remains some silver lining in the 25% trade levy as it remains relatively lower to that of most of its Asean peers, including Laos, Myanmar, Cambodia, Thailand and Indonesia.
"Importantly, Malaysia still has a window to negotiate until Aug 1, before the new rates take effect," said the research firm.
However, it affirmed the development is likely to weigh on investor sentiment.
On the local bourse, MPI dropped 80 sen to RM21.48, DKSH shed 18 sen to RM4.81 and United Plantation slid 18 sne to RM21.62.
Top actives were NexG flat at 42 sen, Top Glove sliding 0.4 sen to 68.5 sen and Supermax rising four sne to 63 sen.
