PETALING JAYA: Malaysia must speed up ongoing free trade agreement talks and consider negotiating one with the United States to soften the impact of the Donald Trump administration's tariffs, says the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
These ongoing negotiations are with the European Union and Gulf Cooperation Council.
ACCCIM said Malaysia should also leverage existing bilateral and multilateral trade agreements to expand trade, such as the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the China-Asean Free Trade Agreement.
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This followed Trump's announcement of a baseline tariff of 10% on all countries and higher duties on some countries, including Malaysia at 24%.
ACCIM expressed regret over the decision, noting its disruption of bilateral trade between both countries while also being harmful to businesses and exports.
“We question how the United States Trade Representative derived that Malaysia currently has imposed an average tariff of 47% on US goods, including currency manipulation and trade barriers,” it said in a statement on Thursday (April 3).
Malaysia was removed from the US Treasury Department's monitoring list for currency manipulation as of November.
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“We are concerned that the tariff actions and retaliation among major economies could spark a global trade war that can disrupt supply chains, slow global economic growth, and lead to increased costs for consumers and businesses,” ACCCIM said.
It added that the United States and Malaysia have enjoyed a mutually beneficial trade relationship for decades, with the country being the third largest trading partner of Malaysia last year and accounting for 11.3% of total trade.
“It was Malaysia’s second largest export destination (13.2% share) and was Malaysia’s third largest importer (9.2% share).
“In February, the United States also displaced China as Malaysia’s largest export market (14.8% share).
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“Overall, the United States was the third largest foreign investor in all economic sectors with a total approved investment of RM29.7bil or 17.4% of total foreign investment last year,” it said.
In the same statement, ACCCIM president Datuk Ng Yih Pyng said the tariffs will impact domestic businesses and exporters, hurting the Malaysia-US bilateral relationship.
Ng said the chamber calls for a more collaborative approach to address trade imbalance, emphasising engagement and seeking reasonable solutions through consultations and joint efforts.
“The challenges ahead are daunting for our businesses. ACCCIM will continue to work collaboratively with the Government in developing strategies to mitigate the impact of tariffs,” he said.
He also urged businesses to have a better understanding of tariff implications.
“Stay agile, plan forward, manage costs and explore opportunities to diversify markets,” he said.
