Malaysia Urged to Leverage Trade Pacts Ahead of Potential Trump-Era Tariffs – Economist

KUALA LUMPUR, April 1 (Bernama) – Malaysia should proactively utilise its existing unilateral and multilateral free trade agreements to diversify market access and prepare for any potential fallout from the return of protectionist trade policies, such as tariffs, under a possible second term for U.S. President Donald Trump, an economist has said.

Associate Professor Dr. Ahmed Razman Abdul Latiff, Director of the MBA Programme at Putra Business School, said strengthening trade ties beyond traditional partners like the United States and China will reduce Malaysia’s vulnerability to external shocks.

“Malaysia has already signed several major trade agreements, including the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and has strategic engagement with BRICS countries – Brazil, Russia, India, China, and South Africa,” he told Bernama.

He added that Malaysia’s current ASEAN chairmanship presents a unique opportunity to boost intra-regional trade and deepen economic collaboration within Southeast Asia.

Dr. Ahmed Razman also noted that any reimposition of U.S. tariffs—similar to those previously levied on Mexico, Canada, and China—could provide indirect benefits for Malaysian exporters. The Ministry of Investment, Trade and Industry (MITI) has stated that Malaysian goods may become more price-competitive if rival exporters are subjected to higher U.S. tariffs.

“Such a shift could open the door for Malaysian companies to expand production and increase exports to the U.S.,” he explained. “It may also encourage foreign investors to relocate or expand operations in Malaysia as a way to avoid costly tariffs.”

In a recent reply to the Dewan Negara, MITI said that although Malaysia may not be directly affected by U.S. tariff hikes, the resulting change in global trade flows could offer new openings for local industries.

On Malaysia’s role as ASEAN Chair in 2025, Dr. Ahmed Razman said the smooth hosting of ASEAN-related meetings so far reflects the region’s strong commitment to enhancing economic and trade ties.

This confidence, he noted, is reflected in Bank Negara Malaysia’s forecast of 4.5% to 5.5% economic growth this year, driven by a rebound in domestic activity and rising foreign investment, including from ASEAN member states.

“Although it’s still early to fully measure the economic impact of Malaysia’s ASEAN leadership, the seamless execution of regional meetings highlights strong trust among member countries,” he said. “It also signals their confidence in Malaysia’s role in driving the region’s trade and economic agenda.”

— BERNAMA

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