PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) has expressed dissatisfaction over the United States’ decision to impose a 24% reciprocal tariff on Malaysian exports, given Malaysia’s strong trade relationship with the US and long-standing commitment to open and fair trade.
FMM president Tan Sri Soh Thian Lai noted that while US tariffs exempt semiconductors, pharmaceuticals and some raw materials, most Malaysian exports to the US will face new tariffs. These include key products such as gloves, plastics, electrical and electronic goods not classified under semiconductor categories, and industrial machinery.
Soh said the affected sectors will now face the full 24% tariff, which could lead to a significant reduction in export
volumes, job pressures within affected industries, and the rerouting or restructuring of supply chains involving Malaysian producers and US-linked multinational operations based in Malaysia.
“From FMM’s perspective, while Malaysia’s tariff rate of 24% is comparatively lower than our Asean neighbours namely Cambodia (49%), Vietnam (46%) and Thailand (36%), we are nonetheless categorised within a punitive group of economies. This underscores that Asean economies are facing heightened scrutiny,“ he said in a statement.
FMM welcomes the government’s proactive measures, particularly the Ministry of Investment, Trade and Industry’s continued engagement with US authorities and the establishment of the National Geoeconomic Command Centre (NGCC) as a central coordinating platform.
“These are timely and strategic steps toward ensuring a comprehensive, whole-of-government approach in addressing the impact of the US tariff measures.
“In complementing these efforts, FMM strongly recommends the inclusion of industry representation, particularly FMM, in the NGCC and its associated high-level task forces. This will help ensure that ground-level business realities, supply chain disruptions, and sector-specific vulnerabilities are accurately reflected in the development and execution of mitigation strategies,“ Soh said.
He said Malaysia must maintain a liberal import policy with a 5.6% average “most-favoured-nation” tariff, duty-free access for over 50% of products, and a trade-weighted tariff of just 3.3%, demonstrating the country’s commitment to open markets through World Trade Organization compliance and 16 trade agreements – clear evidence against protectionism that should qualify for reciprocal tariff reconsideration.
Further, he said Malaysia must remain committed to strategic US cooperation on semiconductors, investment screening, and export controls through bilateral and regional frameworks, demonstrating the country’s shared dedication to rules-based trade and supply chain resilience.
“Collectively, these measures would demonstrate Malaysia’s alignment with US trade priorities and may offer a pathway toward the reconsideration or reduction of the current tariff classification.
“Looking ahead, FMM stresses that long-term resilience will depend not only on external diversification but also on sound domestic policies.
“Malaysian exporters are expected to face strong pressure from US importers to reduce their export prices in order to offset the 24% tariff imposed, further squeezing manufacturers’ profit margins,“ Soh said.
He said countries that are heavily impacted by the US tariffs may start diverting their goods to Malaysia and the Asean region, leading to a potential influx of cheaper imports. This, he added, could result in unfair competition for local industries if not carefully monitored and addressed through appropriate safeguards.
Source:
The Sun Daily
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