GEORGE TOWN, April 7, 2025 – ASEAN countries should strengthen cooperation to enhance their technological capabilities and production capacity as a means of reducing dependency on imports from the United States, said Dr. Abdul Rais Abdul Latiff, Senior Lecturer in Economics at the School of Social Sciences, Universiti Sains Malaysia (USM).
His comments follow the recent announcement of new US tariffs by President Donald Trump, which are expected to increase the cost of imported products such as software chips, manufacturing components, and automotive engines.
“These new tariffs will raise costs for several goods we currently have no choice but to import. One of the key solutions is for ASEAN nations to work together to boost regional production. ASEAN is, in many respects, on par with the US in terms of capability,” he said in a statement to Bernama.
Dr. Abdul Rais also suggested that Malaysia explore alternative trade partners and increase domestic technological development in order to produce more local products for export—especially within the ASEAN market.
He emphasized that the world is currently experiencing a “tariff war,” and while the US remains one of Malaysia’s key trading partners, ASEAN solidarity is vital for safeguarding regional economic interests.
FMM Voices Concern Over Impact of US Tariffs on Malaysian Exports
Meanwhile, Penang Chairman of the Federation of Malaysian Manufacturers (FMM), Datuk Seri Lee Teong Li, expressed deep concern over the US’s imposition of a 24% reciprocal tariff on Malaysian exports under the “American Liberation Day” initiative.
He explained that this new rate, which comes into effect on April 9, follows a blanket 10% tariff applied to all countries on April 5 under the International Emergency Economic Powers Act (IEEPA). Malaysia has been shifted from the general 10% group to the higher 24% category due to its significant trade surplus with the US.
Although some key goods like semiconductors, pharmaceuticals, copper, timber, gold, and certain critical minerals are exempt, most Malaysian exports—including gloves, plastics, and electrical and electronic equipment—will be impacted.
Lee warned that these tariffs could cause a sharp drop in export volumes, disrupt employment in affected sectors, and trigger a restructuring of supply chains involving Malaysian manufacturers and multinational companies operating in the country.
He added that broader ecosystem players, including logistics providers and downstream service sectors, could also suffer due to shifts in procurement and production decisions triggered by the new tariffs.
“While Malaysia’s tariff rate of 24% is lower than Cambodia (49%), Vietnam (46%), and Thailand (36%), we are still classified within the penalized group. ASEAN economies are now under tighter scrutiny, and Malaysia competes directly or complements others in sectors like electronics, rubber-based products, and machinery,” he said.
Lee concluded that the new US tariffs could disrupt not only trade flows to the US but also Malaysia’s position in regional and global supply chains. He emphasized the need for strong domestic policies and cautioned that Malaysian exporters may face pressure to lower prices, affecting their profit margins.
“There’s also a risk of cheaper imports being redirected into Malaysia and the region, leading to potential unfair competition if not properly monitored and controlled,” he added.
