Tough duties ahead for exporters

The Star

09-07-2025

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PETALING JAYA: Higher tariffs on Malaysian imports to the United States have left exporters on edge, prompting manufacturers and small firms to urge the government to pursue further talks with the country's largest export market.
They also want the government to provide tax exemptions and aid schemes to industries and to help them find alternative markets to mitigate the impact of the 25% tariff on Malaysian goods going to the United States.
'This latest escalation is risking an already fragile industrial landscape, severely impacting export competitiveness and placing additional strain on manufacturers,' said the Federation of Malaysian Manufacturing (FMM) yesterday.
FMM president Tan Sri Soh Thian Lai said the sector is already reeling from a 10% tariff that had been imposed earlier and rising cost pressures from the expanded Sales and Service Tax (SST) and new electricity rates.
The Federation of Malaysian Business Associations (FMBA) said the most severely impacted industries include electrical and electronics (E&E), medical devices and those making machine components.
'SMEs that supply to larger exporters or are part of the US-linked supply value chains will face declining profits and orders, ultimately affecting jobs and cash flow,' said FMBA vice-chairman Nivas Ragavan.
Micro, small and medium sized firms (MSME) who are key players in the supply chains of the commodity-based export sector will also be impacted, said the Malay Businessmen and Indus­trialists Association of Malaysia (Perdasama).
Another small business group, the SME Association of Malaysia, said that firms involved in the global semi-conductor supply chain will be impacted.
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To overcome these tariffs, Perdasama president Mohd Azamanizam Baharon urged MSMEs to enhance their competitiveness and explore new markets, particularly in Asean, the Middle East and East Asia.
'Perdasama also recommends that the government introduce export support schemes, tax exemptions, or rebates for companies directly impacted by these tariffs so that they may sustain operations and protect jobs,' said Mohd Azamanizam.
FMBA's Nivas also asked the government to provide timely updates for SMEs to prepare for shifting global trade dynamics.
'It is critical for Malaysia to position itself as a strategic, agile hub in the global supply chain and to reassure international stakeholders that we remain open for business despite geopolitical headwinds,' he said.
Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong urged the government to immediately help local businesses have a 'soft landing'.
'Perhaps the government can come up with incentives similar to how China is assisting their EV market,' he said.
While helping local firms deal with the impact, Malay Chamber of Commerce Malaysia (DPMM) president Norsyahrin Hamidon also urged the government to continue negotiating with the United States as the new tariff only goes into effect on Aug 1.
'There is still time for Malaysia to talk to the United States,' he said.
Echoing this, SME Association of Malaysia president Dr Chin Chee Seong said Malaysia should press on with talks with the United States despite the fact that the chances of success are slim.