PETALING JAYA: Malaysian businesses exporting to the United States could see modest gains from the new 10% global tariff, but they still face significant risks as uncertainty lingers over whether the new rate will remain the same, say economists and business groups.
The rate, compared with the previously imposed reciprocal tariff of 19%, could support Malaysian exports to the United States and provide some lift to the domestic economy, said economist Prof Dr Mohd Nazari Ismail of Universiti Malaya.
“This will contribute to an increase in exports to the US. It will help the Malaysian economy since it is lower compared to the 19% imposed earlier.
“However, the final outcome on individual businesses will depend on the details of the new tariffs because there are many exemptions,” he said.
US president Donald Trump announced a temporary 10% global import duty for 150 days to replace his previous reciprocal global tariffs, which were struck down by the US Supreme Court on Feb 20.
Economist Geoffrey Williams, when contacted, said the new 10% tariff may be less burdensome for the relatively small number of exporters directly affected.
Instead, he said, the concern for Malaysian export trade is the strengthening ringgit, which makes exports more expensive.
“To help with this, the Malaysian government should continue with the liberalisation of trade, especially focusing on removing non-tariff barriers to make Malaysian exports more attractive on the global market,” he said.
Small and Medium Enterprises (SMEs) Association Malaysia (Samenta) president Datuk William Ng said local SMEs exporting to the United States could face difficulties due to the pricing uncertainty caused by tariff volatility.
“Unlike multinational corporations that can shift production across borders, many SMEs in sectors such as furniture, textiles and processed food lack the scale and margins to absorb sudden tariff adjustments or rebuild supply chains elsewhere.
“As a result, SMEs could see short-term disruptions as US importers hold back amid tariff uncertainty.
“If large-scale cancellations occur due to this, we will need to quickly help the affected SMEs repurpose or target new markets to redirect excess exports that were meant for the US to other markets.”
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong said the new rate might not have any immediate effect on export due to the constant tariff uncertainties.
“We will likely not see any drop in prices of our exports to the US due to the uncertainty of whether the US will increase the tariff rate again in the near future.
“US importers will have to consider the possibility that tariffs could revert to 19% after this temporary period.”
Koong added that the government should reassess the Agreement on Reciprocal Trade (ART) it signed with the United States in October last year in light of this uncertainty.
“They should also provide clear guidance on the ongoing tariff refund process for any local businesses that are eligible.
“We should also expedite the review of the Regional Comprehensive Economic Partnership (RCEP) agreement to help diversify our export market to our Asean neighbours,” he said.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said the 10% global tariff could pressure Malaysia’s export competitiveness, particularly in key sectors like electronics and other manufactured goods.
“A universal tariff increases the landed cost of Malaysian products, potentially reducing price competitiveness against domestic US producers or countries with more preferential arrangements.”
To prevent this, the government should leverage its various regional and bilateral trade agreements to provide more diversified market access to Malaysian products and services, Nivas said.
