PETALING JAYA: With the United States’ global tariff rate constantly shifting, local exporters say they are very much in the dark on latest developments involving its tariff policy.
Industry leaders say the uncertainty, mainly over whether the new 15% tariff will replace the earlier 19% reciprocal rate or be imposed on top of it, made it difficult for manufacturers to plan production and export strategies.
Muar Furniture Association (MFA) president Steve Ong said such a scenario made it impossible for furniture producers to make necessary changes.
“At the moment, different US government departments are giving varying statements, so the situation remains unclear.
“We will wait for clearer confirmation and formal notice from our US customers before deciding on the next course of action.”
Malaysia’s wood furniture exports recorded a total of RM9.9bil in 2024. Of this, exports to the United States represented 57.8% of the total wooden furniture export that year, totalling RM5.71bil, based on data from the Malaysian Timber Council.
Electrical and Electronics (E&E) Association of Malaysia president Albert Tan said previous US tariffs had caused uncertainty and the “new wave of tariffs” only worsened the issue.
“Previous tariff actions already caused uncertainty in planning and pricing for our sector, with many manufacturers having to factor in higher landed costs when exporting to the US market.
“This led some US buyers to defer orders, renegotiate prices or seek alternative sourcing even before the new 15% tariff was announced.”
To overcome this, Tan said some local E&E firms have begun diversifying their exports to South-East Asia, Europe and the Middle East where tariff exposure was lower.
“Some are redesigning their product portfolios to qualify for tariff exemptions or pivot into electronics that are not subject to the same duties.
“Others are optimising cost structures and negotiating closer pricing terms with buyers to retain competitiveness.”
SME Association of Malaysia national president Dr Chin Chee Seong said some companies were at a complete loss on what to do, with many trying to fulfil orders placed before the new tariff changes.
“We are still very much confused and awaiting instruction from the Investment, Trade and Industry Ministry. There has been no official document, reply or instructions from the US side and our partners.
“We are worried that US importers will hold orders and attempt to renegotiate a deal.”
Chin said many SME manufacturers exporting to the United States have already been heavily affected by previous tariffs which, combined with the strengthening ringgit, have made doing business with the United States very difficult.
US President Donald Trump initially announced a new temporary 10% global tariff through a different legal avenue to replace his previous reciprocal global tariffs, which was struck down by the US Supreme Court on Friday.
Further instability struck global trade when Trump announced, without any clear justification, the following day that he would raise his new temporary global tariff rate to 15%.
Meanwhile, Prime Minister Datuk Seri Anwar Ibrahim said Malaysia was closely monitoring the implications of the US Supreme Court ruling that struck down tariffs imposed by Trump, with Miti coordinating with Washington and Asean partners to determine the next steps.
“With regard to the tariffs, (Miti Minister) Datuk Seri Johari Ghani has already provided an explanation, and we will receive a detailed briefing before we respond,” he told reporters after a buka puasa ceremony with the Islamic Development Department of Malaysia (Jakim) and the launch of the “Rakan Masjid x Rakan Muda Ramadan” programme in Kuala Lumpur yesterday.
