KUALA LUMPUR: Malaysia’s trade with the United States surged 15.4% to RM270.88bil between January and September this year, up from RM234.68bil in the same period last year, says Tengku Datuk Seri Zafrul Abdul Aziz (pic).
Given this significant trade volume, the Investment, Trade and Industry Minister said any changes in US trade policy, particularly the introduction of retaliatory tariffs against Malaysia, will have a direct impact on the nation’s economy and interests if not handled prudently.
“If Malaysia had chosen not to negotiate or had imposed retaliatory tariffs against the United States, it could have had negative repercussions, jeopardising export markets worth RM198.65bil across various sectors that support the economy, including SMEs, and affecting millions of workers,” he said in a parliamentary written reply to a question raised by Datuk Seri Ismail Sabri Yaakob (BN-Bera).
Ismail Sabri had asked Miti to state the impact of the new tariffs announced by the United States.
“Through Miti, the government pursued trade diplomacy negotiations to safeguard national interests without compromising Malaysia’s economic priorities.
“This approach proved successful when negotiations were concluded and signed between the Prime Minister and the US President on Oct 26, whereby the countervailing tariff imposed on Aug 1 was maintained at 19%,” he said.
He explained that the imposition of high reciprocal tariffs, for instance, 25% on July 7, if not managed carefully through negotiations, could directly affect demand for Malaysian products in the US market.
“This is because higher tariffs would make local goods less competitive in the United States, while US importers are likely to pass the additional tariff burden onto Malaysian exporters,” he said.
He also listed the major impacts of high tariffs including reduced or cancelled orders for Malaysian products due to higher prices compared to similar goods from countries enjoying lower tariffs.
“Consequently, local producers will face pressure to lower prices to maintain demand from the United States, which, in the long term, will affect profitability, resilience and business sustainability,” he said.
