Made in Malaysia, taxed in America, sold back at triple the price: Here's how the US trade tariff could affect us

Malay Mail

3 days ago

KUALA LUMPUR, Aug 2 — A new tariff imposed by the United States on most Malaysian exports could soon pinch Malaysian consumers, not just exporters, as goods caught in global supply chains boomerang back home at inflated prices.
From rubber gloves to furniture, palm oil and solar panels, Malaysian-made products that are shipped to the US and later re-exported under global brands, could return with nearly triple the original price tag, economists warn.
How does it work anyway?
A rubber glove made in Klang costs RM1 at the factory. Once it enters the US, it's hit with the 19 per cent tariff, bumping the landed price to RM1.19.
By the time it goes through importers, distributors and retailers, it could retail for RM2.49 in the US.
But the cost hike doesn't stop there.
If that same glove is repackaged or sold as part of a medical kit by a multinational and shipped back to Malaysia, the price might climb to RM2.89 – nearly three times what it originally cost.
'Theoretically, these products could come in and out several times from various countries as global supply chains are very complex,' Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid tol The New Straits Times in an article published yesterday.
He said many Malaysian-made goods re-enter the country as part of branded global products, with costs stacked on at every step.
Afzanizam indicated that semiconductors are possibly due to be spared due to special exemptions.
What products are affected?
According to The New Straits Times, five key sectors are likely to be affected by the US tariff, despite being revised down to 19 per cent from an initial 25 per cent.
Gloves: Used worldwide in healthcare; made by companies like Top Glove Corp Bhd
Furniture: Major Malaysian export to US retailers
Solar panels: Manufactured here, often re-exported
Machinery components: Integral to multinational supply chains
Palm oil-based products: Common in foods, cosmetics, and industrial goods
State of Malaysia-US trade
The US has been Malaysia's third largest trade partner since 2015, according to data from the Malaysia External Trade Development Corporation.
Last year, total trade went up almost 30 per cent to RM324.91 billion compared to 2023.
Exports to the US also went up 23.2 per cent to a record RM198.65 billion in Electric and Electronic products (these include microchips, TVs, phones, refrigerators, air-conditioners, circuit boards, and switchboards), machinery, equipment, and parts as well as rubber products.
Imports from the US went up by 42.1 per cent to RM126.26 billion last year.
Three key imports of 2024 were E&E products; machinery, equipment, and parts; and chemicals and chemical products.
Bottom line
The 19 per cent US tariff isn't just a trade statistic; it's a global price hike in disguise as part of the global trade route that goes from Malaysia to the US and back to Malaysia at a cost you won't see coming.