Latest news with #Perantim
The Star
14-05-2025
- Business
- The Star
‘Diversify before pause ends'
PETALING JAYA: Local businesses are urged to diversify their export markets to mitigate the risks associated with over-reliance on a single market, despite the 90-day pause in the United States-China tariff war. Small and Medium Enterprises Association of Malaysia (Samenta) president Datuk William Ng said the de-escalation of the tariff war between the two countries was a huge relief and is hoping it holds. 'The economic impact of a sustained trade conflict between the world's two largest economies will impact economies everywhere. 'Regardless of the latest developments, it is crucial that our exporters diversify our markets immediately to reduce single-market risks,' he said when contacted yesterday. Washington and Beijing had agreed to drastically lower sky-high tariffs in a deal that emerged from pivotal talks at the weekend in Geneva. Under the agreement, US duties on Chinese goods will be lowered from 145% to 30%, while China's retaliatory tariffs on US imports will be lowered from 125% to 10%. China also removed a ban on airlines taking delivery of Boeing planes, according to international reports. Brace for it: (From left) Ng, Nivas and Johori advise businesses to prepare for the worst-case scenario. Ng, however, said given the fluidity of the situation and the policy uncertainty, Malaysia would need to brace for the worst-case scenario, including the possibility that the 24% tariff announced earlier could be imposed upon the expiry of the 90-day pause. 'The RM1bil intervention fund announced by the Prime Minister should proceed, with a focus on helping businesses, especially small and medium enterprises (SMEs), expand their access into non-traditional markets. 'As it is, we are not seeing any climb down by customers in the United States on requests for price adjustments, nor do we see any spike in demand from either China or the United States. 'The picture will be much clearer towards the end of the 90-day pause,' he said. At the same time, Ng said it was crucial for the Investment, Trade and Industry Ministry to consider re-delegating the issuance of non-preferential certificates of origin (NPCO) for US exports to chambers and associations, given the latest developments. 'These need not happen immediately, but they should be in the pipeline should the de-escalation in tariffs continue,' added Ng. Malaysia Medical Devices Manufacturers Association (Perantim) president Johari Abu Kasim said both the United States and China were two critical markets to Malaysia's medical device industry and that the country and the rest of the world needed market stability to return. 'Nonetheless, small nations' trades are not in their list of priorities, and Malaysia needs to get ready and brace for the worst,' he said. However, after 90 days of observing the recent tough trade disputes between the United States and other countries, Perantim urged the government to actively seek new markets, particularly in Asean, OIC countries, and BRICS. The group also suggested reviewing all 16 existing free trade agreements and pushing for fair, two-way trade deals. SME Association of Malaysia national president Chin Chee Seong said that the suspension of tariffs between the United States and China presents a favourable opportunity for Malaysia to negotiate lower tariffs. 'This will bring back the supply chain and reduce disruption in existing shipping lines. 'I hope the situation will further improve and be good for our economy too,' he said. Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry (KLSICCI) president Nivas Ragavan said the US-China decision was a welcome development for global trade stability. 'While it's a positive signal, whether this detente will hold remains uncertain,' he said. 'Both nations have deep strategic and economic rivalries, and any breakdown in negotiations could see tariffs being reimposed, possibly even reverting to triple-digit levels if talks falter.' For Malaysia, the truce offered short-term relief and opportunities, said Nivas. 'As a trading nation with strong links to both the United States and China, Malaysia has previously benefited from trade diversion effects, as companies sought alternative sourcing and manufacturing hubs. 'A continued pause could allow Malaysian exporters to better plan their trade flows, while our semiconductor, electrical and electronics and palm oil sectors stand to gain from more stable global demand,' he said.
The Star
22-04-2025
- Business
- The Star
Gloved up for fluid tariffs
PETALING JAYA: As the United States considers imposing tariffs on pharmaceutical imports worth US$200bil, Malaysian medical product manufacturers are bracing for the potential impact of US President Donald Trump's announcement on the local industry. According to the Health Ministry, Malaysia's medical device exports to the United States were valued at RM13.69bil (US$3.07bil) in 2024, making up 36.97% of the country's total medical device exports, which stood at RM37.03bil. Meanwhile, pharmaceutical exports to the United States were worth RM560mil, or 18.48% of Malaysia's total pharmaceutical exports, which amounted to RM3.03bil. Malaysian Medical Device Manufacturers Association (Perantim) president Johari Abu Kasim said the impacts were already felt when Trump announced the 24% reciprocal tariffs against Malaysia earlier this month. As a knee-jerk reaction to this announcement, there were some cancellation of orders from US-based importers. Johari said medical grade gloves, catheters and syringes are some key products exported to the United States. ALSO READ: Govt to proceed with medicine price transparency roll out on May 1, says Armizan 'We also export indirectly through Singapore. 'This accounts for about 23% to 25%,' he said. Johari acknowledged that the tariff threat has left some exporters jittery as the situation remains fluid and uncertain. However, he sees a silver lining, noting that the 145% tariff rate on China would make Malaysian products more competitively priced. Johari said some Perantim members are also looking at the possibility of setting up satellite production plants in the United States so that they can produce there and supply the American domestic market. As a mitigation measure, medical device manufacturers are also looking for new markets, he said. (Click To Enlarge) 'We are working with Matrade to look into new non-traditional markets,' he said. 'It is also time to tap into Asean's strength and boost intra-Asean trade. 'We are now chairing Asean. I think there are a lot of things we can do.' Ching Choon Siong, executive director of the Association of Malaysian Medical Industries (AMMI), stated that the reciprocal tariffs will affect price competitiveness, export volume of medical devices to the United States, as well as the profitability of exporters. 'Based on initial survey responses, our members expect the chain effects will lead to price increases globally, thus impacting the cost of goods sold. 'However, they do not foresee any immediate change in export demand and will assess the impact of these tariffs, or any potential reciprocal tariffs, in the long term,' he added. Pharmaniaga Bhd managing director Zulkifli Jafar said the pharmaceutical company currently does not engage in any direct export activities to the United States. 'Therefore, the recent imposition of tariffs by the US government does not have any immediate or direct impact on our operations. 'However, we remain mindful of the interconnected nature of global trade, where policy changes in one region can influence supply chains worldwide. 'While we do not anticipate any significant impact at this stage, we are closely monitoring the situation to stay ahead of any potential downstream implications that may emerge,' he said. At present, Pharmaniaga is actively engaging with local and international suppliers to assess the possible risks and to align on contingency plans. 'This ongoing collaboration will enable us to respond swiftly and effectively, with the flexibility needed to adapt if conditions change,' Zulkifli said. 'Our commitment to operational continuity and supply chain resilience remains steadfast and through a proactive and vigilant approach. 'We aim to ensure uninterrupted services to our customers and partners, even as the global landscape continues to evolve,' he added. During Trump's first term in office, medical devices and protective gear produced in China, Mexico and Canada were exempted from duties – although reports suggest that they may not receive a reprieve this time around.
