PETALING JAYA: Economists appear divided on whether the United States’ 19% tariff, which took effect on Aug 8, will significantly impact Malaysia’s exports.
An early indicator could be seen in Singapore, which earlier this week reported a further decline in exports for August, deepening July’s contraction as both electronic and non-electronic products were hit by US-imposed tariffs.
Singapore’s non-oil domestic exports (NODX) shrank by a sharper-than-expected 11.3% year-on-year (y-o-y) in August, compared to a 4.7% decline in July, primarily due to a steep drop in non-electronic shipments.
The key drag was NODX to the United States, which economists said reflects the rising impact of tariffs and the fading effect of front-loading in electronics.
Singapore’s August export performance fell short of Bloomberg’s forecast, which had projected a 0.8% increase in key exports.
In contrast, Malaysia recorded a 6.8% y-o-y increase in exports to RM140.45bil in July, and may continue to see modest growth, according to Professor Yeah Kim Leng, an economist at Sunway University.
“After July’s 6.8% y-o-y rebound from a slump in the previous two months (3.6% fall in May and 1.2% decline in April), the country’s merchandise export growth is expected to be sustained at 5% to 6% in August.
“With total exports expanding by 4.3% in the first seven months over the same period last year, full-year export growth is projected at 6%. This is based on ringgit values,” Yeah told StarBiz.
“In dollar terms, export growth would have been in double-digit territory as the ringgit had appreciated by nearly 10% against the US dollar.
“The moderately strong export growth, despite global economic and tariff uncertainties, can be attributed to Malaysia’s diversified exports and the continued global demand, particularly for electronics,” he added.
Despite the anticipated impact of US tariffs on Malaysia’s exports, Yeah said this effect is “slow-acting”, as importers gradually adjust to tariff-induced price changes and US domestic demand responds to potentially higher prices.
Meanwhile, BIMB Securities Research chief economist Imran Nurginias Ibrahim appeared more bearish in his export projections for the country.
“Malaysia’s external trade is expected to soften in August, with exports likely to moderate to around 2.8% y-o-y from 6.8% in July, while imports are anticipated to edge up by just 0.5%.
“The slowdown reflects the absence of earlier front-loading, weaker external demand and a more measured pace of shipments following earlier stockpiling,” Imran told StarBiz.
Moving forward, he said the outlook continues to be clouded by rising US tariff pressures, which could weigh on Malaysia’s export prospects, particularly in the electrical and electronics and commodity-linked segments.
“While trade diversion and Asean supply chain integration may offer some buffers, the overall external environment is set to become more challenging, likely capping the pace of Malaysia trade recovery through the rest of 2025,” he added.
