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New Straits Times
07-05-2025
- Business
- New Straits Times
Eye on emerging markets
KUALA LUMPUR: Malaysia is stepping up efforts to strengthen trade ties with emerging markets in a bid to reduce reliance on traditional partners like the United States, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. Speaking at the launch of the Ministry of Investment, Trade and Industry's (MITI) Q1 2025 Performance Report Card, Tengku Zafrul said Malaysia is deepening engagement with BRICS nations (Brazil, Russia, India, China, South Africa), the MERCOSUR bloc in South America, and fast-growing regions in Africa. This strategic shift is aimed at diversifying the country's export destinations, reducing exposure to external shocks, and opening new revenue streams for Malaysian businesses, he said. Malaysia is tapping into the steady growth of these emerging economies over the past three years to create alternative markets for goods traditionally exported to the US. The approach also supports broader efforts to narrow the trade deficit and ensure long-term export sustainability. Despite global trade tensions and fresh US tariffs on selected goods, Malaysia's export sector outperformed expectations in 2024, showing strong momentum going into 2025. Tengku Zafrul noted that Malaysia's electrical and electronic (E&E) exports alone reached RM601.21 billion in 2024, with a 19.7 per cent year-on-year increase in the first quarter of 2025. The machinery and equipment sector recorded RM69.01 billion in exports, up 10.2 per cent, while medical devices exports hit RM37.03 billion, reflecting a 9.9 per cent increase. Tengku Zafrul said that these figures reveal the underlying strength and competitiveness of Malaysia's manufacturing base at a time when global trade tensions have intensified. Addressing the impact of the US's latest round of tariffs, Tengku Zafrul identified eight industries bearing the brunt of the measures: E&E, machinery and equipment, medical devices, furniture, palm oil and rubber, pharmaceuticals, automotive, and aerospace. Despite this, he remained cautiously optimistic. "More than 50 per cent of our E&E products, particularly those outside the semiconductors category have been exempted from the additional US tariffs." Tengku Zafrul also stressed Malaysia's vital role within the US manufacturing ecosystem. "In 2024, 60.3 per cent of Malaysia's exports to the US comprised E&E products valued at RM119.86 billion, and 65 per cent of these were produced by American companies operating in Malaysia." This synergy, he said, is rooted in complementary strengths: Malaysia excels in chip testing, assembly, and packaging, while the US maintains its edge in design, IP licensing, and advanced semiconductor fabrication. Special consideration package under review, likely by July The government's Special Consideration Package—designed to assist industries impacted by global trade realignments and US-imposed reciprocal tariffs—is still being finalised and is expected to be announced by July. Tengku Zafrul said that discussions with affected companies remain a top priority. "We may announce it after July, as our current focus is on discussions with companies. Once we understand the impact, identify the affected companies, and determine which supply chains are disrupted, we will be able to make a decision," he said. This follows Prime Minister Datuk Seri Anwar Ibrahim's earlier announcement of key elements under the broader package, including an additional RM1 billion in guarantees through the Business Financing Guarantee Scheme to help small- and medium-sized exporters access commercial bank loans. A Another RM500 million in soft loans will be chanelled through development financial institutions to support SMEs hit by US tariffs, with close monitoring for effective implementation. Tengku Zafrul said that while the ministry aims to provide as much support as possible, certain financial considerations must be carefully assessed to avoid straining the government's fiscal position. "Our investment division is committed to helping as much as possible, but at the same time, there are fiscal concerns that need to be reviewed before making a final decision," he added. Industries most impacted by the trade measures include electrical and electronics (E&E), machinery and equipment, medical devices, furniture, palm oil and rubber, pharmaceuticals, automotive, and aerospace. Tengku Zafrul also noted that some sectors have yet to fully tap into existing government support facilities, suggesting a need for further evaluation before finalising the package. The Special Consideration Package is expected to include additional incentives for companies affected by adjustments to global trade and investment policies, including tax and export-import tariff measures.
New Straits Times
06-05-2025
- Business
- New Straits Times
Malaysia broadens trade horizons amid global tensions and US tariffs
KUALA LUMPUR: Malaysia is stepping up efforts to strengthen trade ties with emerging markets in a bid to reduce reliance on traditional partners like the United States, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz. Speaking at the launch of the Ministry of Investment, Trade and Industry's (MITI) Q1 2025 Performance Report Card, Tengku Zafrul said Malaysia is deepening engagement with BRICS nations (Brazil, Russia, India, China, South Africa), the MERCOSUR bloc in South America, and fast-growing regions in Africa. This strategic shift is aimed at diversifying the country's export destinations, reducing exposure to external shocks, and opening new revenue streams for Malaysian businesses, he said. Malaysia is tapping into the steady growth of these emerging economies over the past three years to create alternative markets for goods traditionally exported to the US. The approach also supports broader efforts to narrow the trade deficit and ensure long-term export sustainability. Despite global trade tensions and fresh US tariffs on selected goods, Malaysia's export sector outperformed expectations in 2024, showing strong momentum going into 2025. Tengku Zafrul noted that Malaysia's electrical and electronic (E&E) exports alone reached RM601.21 billion in 2024, with a 19.7 per cent year-on-year increase in the first quarter of 2025. The machinery and equipment sector recorded RM69.01 billion in exports, up 10.2 per cent, while medical devices exports hit RM37.03 billion, reflecting a 9.9 per cent increase. Tengku Zafrul said that these figures reveal the underlying strength and competitiveness of Malaysia's manufacturing base at a time when global trade tensions have intensified. Addressing the impact of the US's latest round of tariffs, Tengku Zafrul identified eight industries bearing the brunt of the measures: E&E, machinery and equipment, medical devices, furniture, palm oil and rubber, pharmaceuticals, automotive, and aerospace. Despite this, he remained cautiously optimistic. "More than 50 per cent of our E&E products, particularly those outside the semiconductors category have been exempted from the additional US tariffs." Tengku Zafrul also stressed Malaysia's vital role within the US manufacturing ecosystem. "In 2024, 60.3 per cent of Malaysia's exports to the US comprised E&E products valued at RM119.86 billion, and 65 per cent of these were produced by American companies operating in Malaysia." This synergy, he said, is rooted in complementary strengths: Malaysia excels in chip testing, assembly, and packaging, while the US maintains its edge in design, IP licensing, and advanced semiconductor fabrication.
