What US tariffs mean for Malaysian businesses and workers

South China Morning Post

5 days ago

When the
US tariffs finally landed on July 31, the 19 per cent rate came as some relief in
Malaysia . But in the days since, Malaysia's government, businesses and confused public are still unpacking the fine print in a deal that gives US companies wide open access to their home market – while restricting its own giant economy to Malaysian exports.
The tariff rate puts Malaysia on equal footing with
Indonesia
Thailand and the
Philippines , and slightly better off than
Vietnam 's 20 per cent.
At face value, that means Malaysia retains a comparative advantage over its
Southeast Asian peers with its higher base of performance in mature industries, including the semiconductor sector.
But it is still a slap in the face for a country which sent a record 198.7 billion ringgit (US$47 billion) in shipments to the US last year. Export businesses are bracing for plummeting demand from US clients as prices are likely to soar when the tariffs take effect from August 7.
The deal also raises questions as to whether Malaysia gave up too much, especially with its pledge to spend US$240 billion on US products and investments over the next decade.
While it is still early days – finer details of the deal will be known after Malaysia and the US officially sign a trade agreement later this year – many are already preparing for the worst. Here's what we know … and some of what we do not.
1. Who will hurt the most?