Tariff battleground is in our own backyard

FOLLOWING US President Donald Trump’s announcement of a 25% tariff on Malaysian exports, several misconceptions have emerged that need addressing. I believe much of the public reaction is based on incomplete facts and misguided assumptions.

Yes, it’s a serious development. Yet, two key claims circulating are particularly off-base. The first is the mistaken belief that the 25% rate is already locked in. Some even wrongly think it’s 35%. Actually, Trump has simply pushed back the negotiation deadline for his so-called “Liberation Day” tariffs to Aug 1, 2025.

This means the tariff is still under discussion. It is not final. Our Investment, Trade and Industry Ministry (Miti), led by Datuk Seri Tengku Zafrul Tengku Aziz, has already engaged American counterparts multiple times and made clear that Malaysia will not retaliate. Now is the time to back our negotiators, not undermine them with cheap commentary.

The second claim is that Malaysia has somehow “failed” diplomatically because the proposed tariff increased from 24% to 25% while other countries supposedly received better treatment.

But Malaysia isn’t alone. Japan’s rate also rose, from 24% to 25%, despite its consistent efforts to court Trump diplomatically.

The Philippines saw a sharper jump from 17% to 20%. And the Philippines, often described as one of the most pro-United States countries in Asean, still did not escape a hike.

So let’s stop pretending this is about who Trump likes or dislikes. The truth is, Trump’s trade policy is transactional and erratic. He has no fixed ideological compass beyond the belief that he must “win” at all costs.

Even perceived allies get hit. Trump has previously spoken fondly of Vladimir Putin, yet recently lashed out at him in crude terms. He will reverse his positions whenever he thinks there’s political gain. Total alignment with his agenda does not guarantee immunity.

Some point to countries like Vietnam, arguing that their proposed tariffs are lower. But this ignores the fine print. In Vietnam’s case, the tariff can shoot up to 40% if exports are deemed “transshipped” from China. The same threat applies to others, including Malaysia.

But what does “transshipment” mean here? Goods containing raw materials from China? Companies with Chinese shareholders? No one knows yet. That uncertainty could become a far bigger burden than the tariff itself.

So, even countries with lower initial rates may end up worse off, depending on how these rules are enforced. Trade policy under Trump is more about leverage and unpredictability than consistency or fairness.

Let’s also not forget: no deal with Trump is truly permanent. Even if Malaysia manages to strike a deal that appears favourable now, there is no guarantee he won’t tear it up in six months if he thinks it serves his interests.

Which brings us to the bigger point: this is not a case of Malaysia failing. It is a case of some Malaysians rushing to declare failure or, worse, seeming eager to see it happen.

The only viable long-term strategy is to remain vigilant, diversify our trade and keep moving our economy up the value chain, which is exactly what the government of Datuk Seri Anwar Ibrahim is working on.

Of course, we cannot afford to cut ties with the United States just as we cannot afford to ignore China. Both remain crucial trade partners. That’s precisely why these negotiations matter, and why the team at Miti deserves our support, not public scorn.

In this so-called “tariff war”, the most critical battleground is not in Washington but right here at home.

LEE KAH HOONG

Johor Baru