OSAKA: Countries hit by US tariffs face slower growth, though not necessarily fall into a recession, says Tengku Datuk Seri Zafrul Abdul Aziz.
The Investment and Trade Minister said Malaysia remained competitive compared to regional peers, with average tariff levels not far off from countries like Taiwan.
However, he said that any slowdown to the US economy, due to its scale - representing nearly 27% of global GDP - would have far-reaching consequences.
“Some countries might get hit harder than others, depending on how open their economies are or how big a trading partner the United States is to them.
For Malaysia, Tengku Zafrul said trade with the United States was around 15%.
“Of course, we are trading 85% with other markets. Having said that, the United States is our largest export market, exporting close to RM200bil in 2024,” he told reporters after visiting the Malaysian Pavilion at the World Expo 2025 here.
Tengku Zafrul said Malaysia was already forecasting a lower growth rate for the year, pointing to Bank Negara’s new gross domestic product (GDP) growth forecast.
On July 29, the central bank announced a growth forecast of 4%-4.8% for Malaysia, a downgrade from the previous projection of 4.5% to 5.5% growth rate.
Tengku Zafrul said another concern would be whether the tariffs would affect demand for goods.
“As the price goes up, and if suppliers or producers cannot absorb the increase, they will have to pass to the buyers.
“And when you pass to the consumers, can they afford it? Or maybe the buyer can, but they will not buy as much.
“This is the knock-on effect on the economy,” he explained.
