PETALING JAYA: Malaysia’s export outlook appears set to remain resilient despite the United States’ latest tariff measures, with economists expecting the country’s semiconductor-led trade to weather the impact better than many of its regional peers.
While Washington’s new Section 301 tariffs, announced in late-July, have raised concerns over the implications for global trade, analysts said Malaysia is relatively well insulated, as most of its key semiconductor and electronics exports are exempted from the new duties.
The focus is now shifting from the immediate tariff impact to the broader economic consequences, and while the direct effect on Malaysia’s exports is likely to be limited, caution that any slowdown in US demand or global manufacturing activity could still weigh on the country’s trade performance.
Economists see opportunities for Malaysia to strengthen its position in global supply chains if multinational companies continue to diversify production towards countries whose key exports remain largely unaffected by the latest US trade measures.
Phillip Capital economist Patrick Chong said with the United States having included semiconductors and most electrical and electronics (E&E) products under its universal exemption list, the global semiconductor supply chain is unlikely to be significantly disrupted.
“As such, we expect the impact of the new US tariff policy on Malaysia’s external demand to remain relatively limited,” he said in a note published yesterday.
Summarising the new tariff policy, Chong said countries will be subject to either a 10% or 12.5% tariff rate, depending on the strength of their labour safeguard policies and the extent to which they prohibit the importation of goods produced using forced labour.
Malaysia is among 17 countries subjected to the 10% tariff rate.
Chong estimates that around 68% of Malaysia’s exports to the United States are exempt from the tariff, including 99.9% of semiconductor exports and 67.1% of other E&E products, before adding that at the national level, only about 4.2% of Malaysia’s total exports are exposed to the 10% tariff, despite the United States accounting for 13.1% of the country’s total exports.
More importantly, he observed that semiconductors remain Malaysia’s largest exempted export category, with an estimated export value of RM55.5bil, followed by other E&E products worth RM44.9bil.
In contrast, the largest tariff-affected categories include other E&E products valued at RM22bil, furniture at RM5.8bil and rubber gloves at RM5.8bil.
“Nevertheless, the impact on Malaysian glove makers remains neutral, as the 10% tariff effectively replaces the existing tariff rate, resulting in no incremental tariff burden,” said Chong, adding that Malaysian manufacturers continue to benefit from significantly higher tariffs imposed on Chinese medical gloves, supporting their competitive position in the United States market.
Chief economist at Bank Muamalat Malaysia Bhd Mohd Afzanizam Abdul Rashid, meanwhile, told StarBiz that thus far, the impact from the previous tariffs imposed by the United States has been manageable.
“If we look at Malaysia’s export growth to the United States, it has gone up by 54.9% for the first half of financial year 2026 versus 28.4% in the same period last year.
“Similarly, economies such as South Korea and Taiwan have recorded strong exports growth to the United States by 50.4% and 67.8%, respectively,” he pointed out.
Afzanizam estimated that the apparent positive effect could be down to the type and quality of products that each of these countries exports to the United States, including Malaysia.
“For semiconductors, Malaysia’s output has been associated with high value added products, which means the industry players in the United States would have difficulties trying to replace these vendors within the supply chain.
Not to mention, the exemptions on certain products related to semiconductors had also helped to insulate the impact of tariffs that have been imposed,” he remarked.
Despite agreeing that the direct impact of the new tariffs on Malaysia would be limited, another economist with a foreign brokerage said it is crucial not to understate the importance of the indirect effects.
“The exemptions for semiconductors and most electrical and electronics products mean Malaysia’s biggest export engine remains largely protected, preventing a sharp hit to export earnings or gross domestic product.
“However, tariffs do not operate in isolation. If the new measures dampen US business investment, weaken consumer spending or slow global manufacturing activity,
“Malaysia could still face softer external demand through lower orders across the regional supply chain,” she cautioned.
The key risk is, therefore, not the 10% tariff itself, but whether it contributes to a broader slowdown in global trade and industrial production, said the economist.
At the same time, she said the tariff framework could create longer-term opportunities for Malaysia if the semiconductor exemptions remain in place, explaining that multinational companies seeking supply chain resilience may view Malaysia as an attractive manufacturing base for higher-value electronics, particularly as geopolitical tensions continue to encourage diversification away from concentrated production hubs.
Whether Malaysia fully capitalises on this opportunity will depend less on tariff policy and more on its ability to provide skilled talent, reliable infrastructure, energy security and a stable investment environment, she notes.
“In that sense, the new US tariffs should be seen not as a major threat to Malaysia’s economy, but as another factor accelerating the global reconfiguration of supply chains – a trend from which Malaysia is well positioned to benefit if it continues to strengthen its competitiveness,” said the economist.
