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Malay Mail
2 days ago
- Business
- Malay Mail
Courtroom tariff wars: Time for Malaysia to build a tariff-proof economy — Yap Wen Min
MAY 31 — On 29 May 2025, a US appeals court temporarily brought back President Trump's sweeping 'Liberation Day' tariffs, just one day after a trade court ruled them illegal. It was a reminder that recent shifts in US trade policy today are shaped not just by economic logic but by political swings — and even the courts now play a role in moderating that balance. For global partners like Malaysia, that means preparing for a world where trade rules are constantly doubted. According to BNM's Monetary Policy Statement (8 May 2025), the tariff measures announced by the US, along with retaliatory actions, have weakened the outlook on global growth and trade. The central bank also highlighted that the balance of risks to Malaysia's growth outlook is tilted to the downside, with references to external factors such as trade tensions and geopolitical uncertainties. Malaysia is among the countries subjected to these elevated tariffs, with a 24 per cent tariff on its exports to the US, justified by Washington as a response to trade imbalances — but applied without consultation. According to the Malaysia External Trade Development Corporation (MATRADE), the rationale behind Malaysia's 24 per cent tariff was based on the US administration's calculation of trade imbalances. In a Presidential Memorandum issued on 2 April 2025, President Donald Trump declared that under the International Emergency Economic Powers Act (IEEPA), large and persistent US goods trade deficits are a threat to national security. The memorandum also stated that its large trade deficits were mainly due to lack of reciprocity in bilateral trade relationships, disparate tariff rates, non-tariff barriers, and economic policies of key trading partners that suppress domestic wages and consumption. The tariffs, which targeted imports from most US trading partners including Malaysia, were introduced under the rationale of correcting 'unfair trade imbalances' (The White House, 2025). Earlier, in February 2025, Trump's administration had separately imposed additional tariffs on China, Mexico, and Canada for enabling the fentanyl crisis. This earlier line of tariffs adds another layer of complexity to the broader trade picture leading into the April 'Liberation Day' announcement. Even if the method of setting 24 per cent for Malaysia may look rational on paper, the way it was applied outside multilateral frameworks and without prior consultation makes it part of a larger erosion of predictable, rules-based trade. Indeed, it has already created ripple effects across supply chains and investment flows. A report by Fitch Ratings also highlighted that these tariffs could lead to increased costs and operational challenges for companies reliant on cross-border trade. In response to these challenges, Malaysia has sought to deepen its economic ties with other partners. Notably, during a state visit by Chinese President Xi Jinping to Kuala Lumpur in April 2025, Malaysia and China signed over 30 bilateral cooperation agreements aimed at enhancing trade and investment relations. These agreements are part of Malaysia's strategy to diversify its trade partnerships and mitigate the impact of US tariffs. At the Asean summit in Kuala Lumpur on 27 May 2025, Southeast Asian leaders reached a consensus that any bilateral trade agreements with the United States regarding tariffs should not negatively impact other member nations. Prime Minister Anwar Ibrahim, serving as ASEAN Chair, emphasized the importance of this unified stance to protect the region's collective economic interests amid global market volatility and the imposition of US-led tariffs that could impose duties ranging from 32 per cent to 49 per cent on six Asean countries. He also announced efforts to engage US President Trump directly to discuss these measures. Trucks drive past containers at the Port of Ningbo-Zhoushan in Ningbo, in China's eastern Zhejiang Province on May 28, 2025. — AFP pic We are entering a period where the rules of global trade are increasingly subject to reinterpretation. Legal challenges, geopolitical shifts, and executive orders constantly reshape what used to be predictable. For Malaysia, reacting case-by-case to new tariffs is no longer enough. In this uncertain climate, what's needed now is a structural, forward-looking strategy to insulate the economy from tariff shocks — positioning Malaysia not just as a victim of trade volatility but as a resilient and indispensable player in global supply chains. By 'tariff-proof', it implies making the economy resilient — able to withstand sudden tariff shocks without stopping growth or investment. Our strategy must tariff-proof the economy by diversifying risk and deepening competitiveness. Reshore and diversify supply chains Malaysia should scale up efforts to attract high-value manufacturing, especially in electronics and semiconductors, by capitalising on the global 'China +1' shift. Multinationals are already looking for alternatives outside China, and Malaysia is the front-runner in Southeast Asia for that trend. Leading global technology companies, including Microsoft, Google, and Oracle, have made substantial investments in Malaysia, reinforcing the country's position as a pivotal hub in the global semiconductor and digital infrastructure sector. The government can speed this up by offering targeted incentives like tax breaks, upgraded infrastructure, and workforce training to attract factories and R&D centres in strategic sectors. At the same time, developing more domestic capacity for key components — or sourcing them from trusted trade partners — would help buffer the impact if US tariffs or Chinese export controls disrupt critical supplies. Expand export support and insurance Even with diversification, Malaysian exporters will face new trade risks. The government should enhance trade finance and risk mitigation tools so that firms can weather tariff shocks. While Malaysia already provides export credit guarantees and market development grants, these should be boosted and made more flexible. It is also crucial to streamline export credit insurance, raise funding caps on trade missions, and help SMEs adapt products for new markets (e.g., halal certification, digital marketing) as recommended by the Federation of Malaysian Manufacturers. Such measures make Malaysian exports tariff-resilient by lowering the cost of finding and developing non-US buyers or adapting to changing rules. Position Malaysia as a trusted, neutral hub Geopolitically, Malaysia's strength lies in neutrality and multilateralism. As the chair of Asean, Malaysia has led calls for trade deals that don't harm neighbours, and this should be translated into concrete policy. For example, the government can work with Asean partners to create a formal Supply Chain Coordination Council. Regional coordination — such as pooled risk-sharing or regional sourcing strategies — can protect Asean economies from the impact of unilateral trade actions. On the home front, Malaysia should continue improving the ease of doing business with trade-friendly customs and financing. We should also promote our currency and banking as alternatives for regional trade settlement to ease heavy reliance on any one superpower's currency. In the US, our diplomat tells Washington that Malaysia is an ally with secure markets and reliable suppliers. We should similarly cultivate ties with China and Europe, offering to host assembly of goods that neither power wants to fully onshore. By actively marketing Malaysia as a stable bridge, we turn uncertainty into opportunity. None of these steps will be easy, but other countries are already moving in similar directions. In short, Malaysia must make its economy tariff-proof — by reshoring key supply lines, expanding export credit and insurance, steering investment into future-ready industries, and leveraging our neutral stance. By doing so, we show investors worldwide that Malaysia is a safe harbour amid trade turbulence. * This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
Barnama
4 days ago
- Business
- Barnama
IHW 2025 Set To Attract 900 Exhibitors, Surpassing MATRADE's Target
BUSINESS KUALA LUMPUR, May 29 (Bernama) -- The upcoming International Healthcare Week (IHW) 2025 is set to break new records with over 900 local, regional, and international exhibitors, well above the initial target of 750 set by the Malaysia External Trade Development Corporation (MATRADE). The IHW will be held at the Malaysia International Trade and Exhibition Centre from July 16 to 18. MATRADE chairman Datuk Seri Reezal Merican Naina Merican announced that the event is also expected to attract more than 21,000 visitors from 26 countries, featuring a wide array of healthcare products, from pharmaceutical ingredients to clinical laboratory instruments. 'This will be the largest healthcare trade show in Southeast Asia,' he said in his opening remarks at the official launch of IHW 2025, here today. At the press conference, ASEAN Informa Markets regional portfolio director Rungphech Chitanuwat said that the surge in exhibitor participation reflects a growing international interest in Malaysia's healthcare sector, particularly in pharmaceuticals. 'The government facilitates market access and creates opportunities for international traders by evaluating and approving medicines from abroad. 'This has attracted the attention of international players in the pharmaceutical sector. When it comes to medical devices and laboratory equipment, I believe Malaysians should be proud as the country is emerging as a leader in medical tourism and hospital services,' she added. Chitanuwat noted that the growth in hospital services reflects rising demand for medical devices and equipment, which in turn fuels the overall expansion of the healthcare sector. MATRADE deputy chief executive of export acceleration Abu Bakar Yusof said the main economic impact of the exhibition would be in the business-to-business (B2B) segment.
Malay Mail
4 days ago
- Business
- Malay Mail
Makiplago unveils mega pavilion for MIHAS 2025 to connect halal SMEs with global markets
PETALING JAYA, May 29 — The Malaysia International Halal Showcase (MIHAS) 2025 will feature the largest-ever pavilion dedicated to connecting Malaysia's halal small and medium enterprises (SMEs) with international markets. Makiplago Sdn Bhd, the driving force behind this initiative, unveiled the Makiplago Pavilion during a soft launch ceremony today, in collaboration with key stakeholders and strategic partners. The event, held in anticipation of MIHAS 2025, showcased Makiplago's vision for an innovative trade ecosystem anchored by its Makiplago Harbour platform. Among the attendees were Malaysia External Trade Development Corporation (MATRADE) exports promotion and market access division director Yusram Yusup, alongside industry leaders. Makiplago founder and chief executive officer Jamaluddin Ibrahim said the pavilion aims to strengthen links between Malaysia's halal SMEs and international markets, particularly in China and Asean. 'The Makiplago Harbour International Pavilion will be the largest at MIHAS 2025, spanning over 1,240 square meters with more than 170 exhibitors. We aim for 50 per cent local participation and the rest from international exhibitors across Singapore, Indonesia, Thailand, the Philippines, Brunei, East Timor, and Papua New Guinea,' Jamaluddin said. The pavilion's design is based on five strategic pillars: • Port Klang trade base • Physical shopping malls and omni-channel retail • Halal chain convenience stores (M-Mart and Oriental-Mart) • Media, digital finance, and tokenisation via Makiplago Harbour Coin (MHC) • Wellness, elderly care, and halal lifestyle services During the event, Makiplago signed a memorandum of understanding with six foundational partners: Yayasan Gostrong Malaysia, Ancom Nylex Berhad, Delta Consult Ing Services Sdn Bhd, Glocal Link (M) Sdn Bhd, Asia Management & Consultancy Sdn Bhd, and Makiplago Sdn Bhd. The partnership aims to foster investment, procurement, and joint development in halal sector infrastructure, commerce, education, media, and wellness. The Makiplago Pavilion seeks to empower SMEs from Malaysia and China by providing direct access to over 2.2 billion Muslim consumers globally. This will be supported by initiatives such as live commerce via Radio Durian, curated halal products for M-Mart and Oriental-Mart, strategic investor engagement, and innovative digital finance solutions ensuring secure transactions. MIHAS 2025 is set to take place in September, marking another milestone in Malaysia's leadership within the global halal industry.
New Straits Times
4 days ago
- Business
- New Straits Times
Matrade targets RM13bil potential trade, investments at Expo 2025 Osaka
KUALA LUMPUR: The Malaysia External Trade Development Corporation (MATRADE) aims to unlock RM13 billion worth of potential trade and investments through its participation in the Expo 2025 Osaka, Japan. Its chief executive officer, Datuk Mohd Mustafa Abdul Aziz said MATRADE, through the Business Programme at the Malaysia Pavilion, helps local companies enter new markets and create impactful connections to boost investments, while showcasing Malaysia's strengths in key growth sectors. Anchored by the pavilion's theme, "Weaving a Future in Harmony" and aligned with the expo's vision to "Design Future Society for Our Lives", he said MATRADE's strategy reflects a forward-looking approach that connects trade with the forces shaping the future. "In this vision, trade is not separate from innovation or sustainability but part of an interconnected system, so linking people, technology and purpose positions Malaysia as a confident and collaborative contributor to shared global prosperity," he said in a statement. Mohd Mustafa said that MATRADE's role has evolved beyond conventional trade promotion, as relying solely on product showcases and buyer introductions is no longer sufficient in today's dynamic market environment. Hence, he said MATRADE's Business Programme embraces a more strategic approach, as global value chains evolve under the pressure of technology and geopolitics. "Through curated engagements such as sector-specific business matching, thematic seminars, and targeted pitching sessions, the initiative is designed to build meaningful, long-term partnerships. "With over 270 meetings held in the first month alone and RM488.88 million in sales secured, it demonstrates the impact of a more purposeful, value-led model of engagement," he said. Meanwhile, Mohd Mustafa said Malaysia's participation at Expo 2025 Osaka comes at a strategically meaningful moment, a point where national ambition meets regional leadership. He said MATRADE's approach supports key economic plans like the New Industrial Master Plan 2030 and the National Trade Blueprint, aiming to boost innovation, trade competitiveness, and promote high-value exports. This momentum is further amplified by Malaysia's current role as Asean chair in 2025, positioning the country as a unifying voice for regional integration and inclusive growth, he added. "As the sole agency driving the business programme, MATRADE is not merely showcasing Malaysian companies, but actively shaping their strategic positioning in line with broader national and regional ambitions. "This includes facilitating direct access to key Japanese and global players, particularly in high-potential sectors such as halal, electrical and electronics, green technology, and life sciences," he said. These engagements form part of a long-term national mission to establish Malaysia as a trusted, innovation-driven trade hub at the heart of the Asia-Pacific. Mohd Mustafa also emphasised that Expo 2025 Osaka is an opportunity for global collaboration in future-forward ideas, with the Malaysia Pavilion reflecting this through its focus on innovation and inclusiveness. He said the expo also offers a timely and symbolic platform to amplify Malaysia's regional voice, strengthen Asean ties, and build momentum for a more resilient and connected global economy. "Malaysia's economic journey has long been defined by adaptation and ambition, from manufacturing excellence to digital transformation," he said. Today, as the global economy pivots toward sustainability and innovation, Malaysia's trade diplomacy, led by MATRADE, is evolving in step with these shifts. Hence, the Business Programme at Expo 2025 Osaka signals more than presence; it signals intent to collaborate, lead, and unlock the next wave of high-impact trade opportunities, said MATRADE.
Barnama
5 days ago
- Business
- Barnama
MITI Studying Proposal To Merge HDC And MATRADE
BUSINESS Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz speaks to the press after attending the ASEAN-Gulf Cooperation Council (GCC) Economic Forum 2025 today. KUALA LUMPUR, May 28 (Bernama) -- The Investment, Trade and Industry Ministry (MITI) is studying the merger of the Halal Development Corporation (HDC) and the Malaysia External Trade Development Corporation (MATRADE). Its Minister Tengku Datuk Seri Zafrul Aziz said the matter is under discussion because there were several other proposals put forward such as strengthening the country's halal industry. "We want to strengthen the halal industry by focusing on halal development and do not want any overlap in terms of halal trade. "We want MATRADE to focus more on halal trade in terms of providing access to halal products, while we want to ensure that HDC focuses more on halal development," he told reporters after the ASEAN-GCC Economic Forum 2025 here today. Tengku Zafrul said the Malaysian Investment Development Authority (MIDA) would focus on investments involving the halal industry. MITI announced recently that MATRADE and HDC would be merging to form a stronger and more cohesive halal trade and industry ecosystem. The ministry said a pro-tem committee for the strategic merger has been established to align resources and operational frameworks while ensuring that the consolidation of functions and jobs is equitably managed. 'The merger aims to enhance Malaysia's leadership and competitiveness in the global halal market, which is projected to reach US$5 trillion by 2030," MITI said in a statement. Meanwhile, Tengku Zafrul said the Malaysian Halal Council secretariat has proposed the establishment of a Halal Commission, which will be brought to the Cabinet's attention soon.
