KUALA LUMPUR: Decisive steps should be made during the United States’ 90-day reciprocal tariff pause window to protect Malaysia’s industrial base and long-term competitiveness, says the Federation of Malaysian Manufacturers (FMM).
Its president Tan Sri Soh Thian Lai said while the reprieve offers Malaysian manufacturers critical breathing space, the suspension is only a short-term relief and must not be mistaken as a resolution.
“FMM members are not treating this pause as a reprieve from action, but rather as a critical window to accelerate, not delay contingency planning,” he said.
Soh said the association recommends the government pursue targeted and sector-specific relief, particularly for rubber products, industrial machinery, non-semiconductor electrical and electronic components, furniture, paint, medical devices, garments and the electronics manufacturing services sectors.
“These industries are vital to both Malaysia’s manufacturing ecosystem and the US supply chain resilience.
“We also encourage the government to highlight Malaysia’s open trade stance, including its low average most-favoured nation tariff and limited use of non-tariff barriers, to support a reassessment of Malaysia’s tariff classification,” he added.
FMM also reiterated its call for urgent government support to bolster the manufacturing sector by reviewing and putting on hold policies that are raising operating costs this year.
Soh said in a formal letter to the Finance Ministry on Tuesday that FMM requested a deferment of the expansion of the Sales and Service Tax (SST) scope, scheduled to take effect from May 1.
“When combined with the upcoming electricity base tariff adjustment in July, these measures will significantly increase business costs and prices of essential goods.
“We have urged the government to conduct a comprehensive impact assessment on the implications of the SST expansion, particularly its effects on inflation, business sustainability and consumer affordability,” he said.
FMM also called for the immediate establishment of a National Supply Chain Council to coordinate cross-ministerial and public-private action on trade resilience, logistics continuity and industrial security.
This council would help identify vulnerabilities and align certification, infrastructure and workforce strategies to better support manufacturers during disruptions.
“At the regional level, FMM urges the government to leverage Malaysia’s Asean chairmanship to propose an Asean Supply Chain Coordination Council.
“This platform will institutionalise regional cooperation on trade facilitation, digitalisation and regional sourcing. Such measures will be critical in preserving Asean’s role as a trusted and agile global production hub,” Soh said.
To safeguard the domestic market against trade diversion and unfair competition, he said there must be proactive safeguards to address the risk of Malaysia becoming a destination for redirected exports from markets still subject to steep US tariffs.
This trade diversion can lead to an influx of imported goods, intensifying competition, suppressing prices and undermining the viability of local manufacturers, he added.
