Tariff Pressures And Trade Shifts Dominate MARC's 2025 Economic Forum

BusinessToday

4 days ago

Trade disruptions, strategic tariff manoeuvres and shifting global alliances took centre stage at Malaysian Rating Corporation Bhd's (MARC) 2025 forum, 'An Afternoon Talk with MARC: Global Economic & Market Outlook, Geopolitics and Tariff Agendas'.
The forum brought together senior executives, economists and policymakers to explore how Malaysia and the region can adapt to an increasingly turbulent global economy.
MARC Group Chief Executive Officer Arshad Mohamed Ismail described the current global climate as one where 'economic tools have become geopolitical weapons'.
He warned that the resurgence of tariffs as a foreign policy instrument, particularly by the US, is reshaping trade flows, amplifying supply chain risk and demanding a fundamental rethink of how nations and businesses compete.
'Malaysia must recalibrate its competitiveness strategy — resilience, adaptability and the ability to form strategic alliances are now more critical than low costs or market access alone,' Arshad said during his opening remarks.
Chief Economist Dr Ray Choy expanded on this view as he forecasted a slowing global growth driven by fragmented monetary policy, fragile consumer sentiment and sustained geopolitical uncertainty for the second half of 2025.
'While the eurozone is showing signs of cautious recovery, the US economy faces headwinds and China continues to struggle with soft domestic demand,' he said, while projecting that Malaysia's GDP to grow 4.4% this year, supported by robust domestic activity and a gradual tourism revival.
Meanwhile, despite challenges such as a higher Sales and Service Tax, MARC said inflation is expected to remain under control.
'Bank Negara Malaysia's (BNM) recent rate cut to 2.75%, in line with global monetary easing, signals a more supportive policy stance aimed at sustaining domestic momentum,' it added.
Separately, a panel discussion titled 'US Tariffs & Geopolitics: Demystifying Nested Agendas' featuring a distinguished lineup of BNM Assistant Governor Mohd Fraziali Ismail, academic and former deputy minister Prof Dr Ong Kian Ming and political analyst Prof Dr Bridget Welsh dissected the underlying motivations behind US trade policy shifts.
The panellists highlighted that recent US actions, including selective tariff reductions and increases. indicate a recalibration of trade posture rather than a return to free trade.
They shared that this evolving terrain has accelerated the formation of regional trade networks, with blocs like ASEAN and the European Union strengthening intra-regional cooperation to buffer against external shocks.
Malaysia, they stressed, should adopt a strategic, non-confrontational approach.
'High-tech sectors such as semiconductors should be prioritised in tariff negotiations, while existing trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership should be fully leveraged to diversify export markets.
'Strengthening ties with fast-growing economies in Asia and the Middle East was also seen as vital,' the panellists said.
The conversation also turned to monetary dynamics as the panellists agreed that the US dollar will remain dominant for the foreseeable future.
Malaysia's approach, they said, should be framed as pragmatic risk management instead of an effort to challenge the dollar's global reserve status.
Subsequently, the closing discussions pointed to cautious optimism for Malaysia's medium-term trajectory where it was shared that while global headwinds persist, the country's strong domestic fundamentals, reform momentum and strategic geographic position offer a buffer against external volatility.
As tariff pressures and geopolitical shifts continue to reshape the global economic landscape, the MARC forum made one point clear: Malaysia's resilience will depend not just on reacting to global trends, but on anticipating them and shaping its own place within a rapidly evolving order. Related