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The Star
2 days ago
- Business
- The Star
24% US tariff looms for Malaysia
PETALING JAYA: With just one month remaining before the United States imposes a 24% tariff on all Malaysian goods exported there, exporters are expressing concerns that more than half of them will be negatively affected if Malaysia fails to secure a deal. The Federation of Malaysian Manufacturers (FMM) said about 52% of local exporters expect demand to decline if the United States proceeds with its tariff hike, with nearly half anticipating profit margins to be slashed by over 30%. Its president Tan Sri Soh Thian Lai warned that such pressures could force some companies, especially those in cost-sensitive sectors like electrical machinery services (EMS), which supports US-linked manufacturing operations in Malaysia, to scale back operations. 'While the full financial impact and potential job losses remain difficult to quantify, FMM cautions that the combined effects of order cuts, shrinking margins and prolonged cost pressures could have serious repercussions for the country's export-reliant industries,' he said when contacted recently. In April, the United States offered a 90-day pause to negotiate new country-specific rates based on trade imbalances. The window is expected to close early next month. Soh added that even if Washington settles for a lower tariff range of 10 to 15%, Malaysia would still be at a competitive disadvantage compared to countries with preferential US market access, raising concerns over a possible long-term shift in sourcing decisions by American buyers. 'Since April 2025, all Malaysian exports entering the United States have already been subjected to an across-the-board 10% tariff, which has added considerable pressure on companies, especially those whose products previously enjoyed low or zero tariffs. 'A further escalation of tariffs would significantly deepen this impact and pose a serious threat to Malaysia's export performance,' added Soh. At the same time, FMM lauded the Investment, Trade and Industry Ministry (Miti) for its proactive efforts through the National Geoeconomic Command Centre Task Force and its recent trade mission to Washington, DC, which included negotiations with the US Trade Representative. FMM said that these engagements are crucial for seeking exemptions from existing levies on products such as steel and aluminium. Socio-Economic Research Centre executive director Lee Heng Guie said that based on its engagement with local players, many businesses are still closely monitoring how the situation unfolds. 'What we've observed since April is that some local exporters, particularly in the electrical and electronics (E&E) sector, have been front-loading their shipments to the United States to beat the higher tariff deadline. 'This spike in export numbers is likely to continue until May or perhaps early June, based on feedback from businesses and buyers we've spoken to,' he said. However, he added that some US buyers are taking a more cautious approach. 'They are delaying shipments and deliveries, adopting a 'wait-and-see' attitude regarding the final tariff decision. 'The concern is that if the tariff jumps to 24%, they may not be willing to absorb that additional cost. 'On the other hand, if the outcome is less than or remains at 10%, they would prefer to wait and only proceed once the situation is clear,' said Lee. He said there were also ongoing negotiations between US buyers and Malaysian sellers on how to manage the tariff burden. Lee stressed that the adjustment process will likely continue well beyond the 90-day pause, as businesses prepare for various outcomes. Malay Economic Action Council senior fellow Ahmad Yazid Othman said, in principle, the council's position is that Malaysia must accept that tariffs would be imposed. 'We hope that the government will do more to spur domestic consumption and be prepared that tariffs will increase. 'As an exporting country, not every sector will be equally affected, which is why we shouldn't put all our eggs in one basket. 'We need to diversify and spread the risk by investing in more economic opportunities across other sectors, especially those not reliant on exports. I believe there's a silver lining in this situation as well,' he said.
Business Recorder
25-04-2025
- Business
- Business Recorder
Karachi visit: US official highlights trade, investment opportunities
KARACHI: US Chargé d'Affaires Natalie Baker visited Karachi April 23-24 to boost trade ties and strengthen business partnerships between the United States and Pakistan. During her visit, CDA Baker met with senior executives from leading Pakistani companies to discuss economic trends, investment opportunities, and ways to grow commercial cooperation. Topics included Pakistan's engagement with the IMF, efforts to improve the business climate, and regional trade. She underscored the importance of private-sector leadership in driving economic growth, saying, "The United States values its economic partnership with Pakistan and sees strong business partnerships as key to building shared prosperity." CDA Baker also met with Sindh Chief Minister Murad Ali Shah and other provincial officials to explore opportunities for closer economic collaboration. Their discussions focused on fair and reciprocal trade, energy cooperation, and innovation in science and technology. In a meeting with the American Business Council, CDA Baker spoke with representatives of US-linked companies about Pakistan's growing tech sector and the promise it holds for exports and job creation. "Pakistan's expanding tech sector shows how open, fair and competitive markets can drive innovation, boost exports, and create jobs that benefit both our countries,' she said. The visit highlighted new opportunities to expand US-Pakistan cooperation in trade, investment, and business – helping to grow exports, attract investment and create jobs that will make both countries stronger, safer, and more prosperous. Copyright Business Recorder, 2025
Time of India
23-04-2025
- Business
- Time of India
Trump's tariff tumble: The twist in US-China trade war
China has mocked Trump's tariffs as a "numbers game" and a "joke" with no economic benefits. By all appearances, Donald Trump is looking for a way out. Just months into his second presidency, the US President is signaling a retreat - or at least a recalibration - on one of his most aggressive economic fronts: the trade war with China. At a White House press conference on Tuesday, Trump appeared to temper his earlier hardline stance on tariffs, saying duties on Chinese imports 'will come down substantially' but 'won't be zero.' His tone was markedly less confrontational: 'We're going to be very nice and they're going to be very nice,' he said, striking an oddly conciliatory note for a man who just weeks ago called Chinese trade practices 'cheating at a planetary scale. ' To some, this sounded like strategy. But to many experts and investors, it sounded more like anxiety. 'Trump is panicking due to the markets plummeting and still very high US treasury yields,' said Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis, in comments to the South China Morning Post. 'He needs a deal - and quick. China does not need to offer anything big in such circumstances.' Beijing isn't biting For now, Beijing appears in no rush to respond. And that, experts say, is precisely the point. Chinese President Xi Jinping has maintained radio silence even as Trump continues to dangle public invitations for dialogue. The response from Beijing has been calculated - and increasingly cold. According to the Kobeissi Letter, state-backed Chinese funds have begun pulling back from US private equity investments under pressure from the government. Major players like the China Investment Corporation have halted planned commitments, and Chinese investors are avoiding US-linked deals, even when managed offshore. The message: China is not only refusing to blink — it's preparing to go without. This week, China's commerce ministry issued a blunt warning: it 'firmly opposes any party reaching a deal at the expense of China's interests.' It's a posture steeped in nationalism and, increasingly, leverage. 'We have an embargo now' Despite the White House's optimistic language, the broader reality is grim. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Google Brain Co-Founder Andrew Ng, Recommends: Read These 5 Books And Turn Your Life Around Blinkist: Andrew Ng's Reading List Undo Treasury secretary Scott Bessent privately admitted in a closed-door investor summit that the current status quo - 145% tariffs by the US and 125% retaliatory duties from China — amounts to 'a two-way embargo.' Though he predicted 'de-escalation' in the near future, he conceded that formal negotiations haven't even begun. 'No one thinks the current situation is sustainable,' Bessent said. But he also acknowledged the absence of a road map. Markets responded favorably - temporarily. The S&P 500 rose 2.5% on the day, buoyed by hopes that Washington might finally relent. But the deeper concern is structural: the tariffs have roiled financial markets, triggered selloffs in US Treasuries, and spooked investors who once viewed the dollar as a safe haven. As the New York Times noted, Trump's personalized approach - ratcheting up pressure to force a top-level summit - has so far failed. Xi Jinping, it seems, won't be strong-armed into a phone call, the NYT said. 'The more he talks, the more anxious he looks' Trump's own remarks may be undercutting his leverage. 'In reality, there hasn't been any substantial progress or change in the US-China tariff negotiations,' said Chen Zhiwu, a professor of finance at the University of Hong Kong. 'This is [Trump's] way of signaling to China.' 'But the more he talks like this, the more it shows how anxious the US side is,' Chen told the SCMP. 'Trump and his team are under pressure, but China isn't showing any signs of impatience.' Others agree that Trump's apparent softening is likely a reflection of pressure at home — not progress abroad. 'Rising living costs, economic disarray, and popular discontent will eventually force a definite pivot,' said Xu Tianchen of the Economist Intelligence Unit. For now, he said, Trump's tariff comments appear more like improvisation than strategy. 'Things are still pretty fluid.' A self-inflicted wound? If Trump's goal was to pressure Beijing into concessions, analysts argue he may have misjudged the moment - and his opponent. The 145% tariffs have hurt Chinese exporters, but they've also fueled inflation in the US, raised costs for American businesses, and alienated allies. China, by contrast, appears increasingly insulated. Years of preparation — diversifying trade routes, investing in domestic supply chains, and cultivating new markets in Asia, Africa, and Europe — have paid off. Beijing has been methodical, and perhaps more importantly, patient. US-China relations are in "effectively a state of economic war," Susan Thornton, who served as acting top US diplomat for East Asia during Trump's first administration, told AFP. "China views Trump's stated intent to... erect a 'tariff wall against China' as illegal and an existential threat," Thornton, now a senior fellow at Yale's Paul Tsai China Center, said. Meanwhile, Washington is bleeding goodwill - and time. No deal, no summit Even the possibility of a Trump-Xi summit now seems remote. 'Trump has torched any realistic chance of a near-term meeting,' said Wu Xinbo of Fudan University. 'His behavior is seen as rude and unreasonable — there's no trust.' Others echo that view. 'Neither Trump nor Xi will want to convey that he has yielded to the other,' Ali Wyne of the International Crisis Group told AFP. 'They both want to look strong. But Xi has the advantage of time.' For Beijing, a deal now - under economic duress and political chaos in Washington - would look like capitulation. That is politically untenable for Xi, who has spent years cultivating an image of strength and resolve. Stay informed with the latest business news, updates on bank holidays and public holidays . Master Value & Valuation with ET! Learn to invest smartly & decode financials. Limited seats at 33% off – Enroll now!
Trade Arabia
17-04-2025
- Business
- Trade Arabia
Tariffs, policy uncertainty to hit global trade: WTO
The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty (TPU), says World Trade Organization's (WTO) Global Trade Outlook report. Based on measures in place as of April 14, including the suspension of 'reciprocal tariffs' by the United States, the volume of world merchandise trade is now expected to decline by 0.2% in 2025 before posting a modest recovery of 2.5% in 2026, it said. The new estimate for 2025 is nearly three percentage points lower than it would have been without recent policy shifts, and marks a significant reversal from the start of the year, when WTO economists expected to see continued trade expansion supported by improving macroeconomic conditions. Risks to the forecast include the implementation of the currently suspended reciprocal tariffs by the United States, as well as a broader spillover of trade policy uncertainty beyond US-linked trade relationships. If enacted, reciprocal tariffs would reduce world merchandise trade growth by an additional 0.6 percentage points, posing particular risks for least-developed countries (LDCs), while a spreading of TPU would shave off a further 0.8 percentage points. Taken together, the reciprocal tariffs and spreading TPU would lead to a 1.5% decline in world merchandise trade volume in 2025, the report said. The impact of recent trade policy changes varies sharply across regions. In the adjusted forecast, North America now subtracts 1.7 percentage points from global merchandise trade growth in 2025, turning the overall figure negative. Asia and Europe continue to contribute positively but less than in the baseline scenario, with Asia's contribution halved to 0.6 percentage points. The combined contribution of other regions – Africa, the Commonwealth of Independent States (CIS), including certain associate and former member states, the Middle East, and South and Central America and the Caribbean – also declines but remains positive. The disruption in US-China trade is expected to trigger significant trade diversion, raising concerns among third markets about increased competition from China. Chinese merchandise exports are projected to rise by 4% to 9% across all regions outside North America as trade is redirected. At the same time, US imports from China are expected to fall sharply in sectors such as textiles, apparel and electrical equipment, creating new export opportunities for other suppliers able to fill the gap. This could open the door for some least-developed countries (LDCs) to increase their exports to the US market. Services trade, though not directly subject to tariffs, is also expected to be adversely affected. Tariff induced declines in goods trade weaken demand for related services such as transport and logistics, while broader uncertainty dampens discretionary spending on travel and slows investment-related services. As a result, the global volume of commercial services trade is now forecast to grow by 4.0% in 2025 and 4.1% in 2026 – well below baseline projections of 5.1% and 4.8%. These figures are part of a new element in our analysis: for the first time, this report includes projections for commercial services trade, complementing our long-standing merchandise trade estimates. WTO economists expect world GDP at market exchange rates to grow by 2.2% in 2025 – 0.6 percentage points below the no-tariff-change baseline – before slightly recovering to 2.4% in 2026. Tariff changes are forecast to have the largest impact on North America (-1.6 percentage points), followed by Asia (-0.4 points) and South and Central America and the Caribbean (-0.2 points). While the imposition of reciprocal tariffs would have a limited effect on the global figure, a wider spread of trade policy uncertainty could nearly double the GDP loss to 1.3 percentage points relative to the baseline. The recent downturn in trade prospects follows a strong performance in 2024, when the volume of world merchandise trade grew by 2.9% and commercial services trade expanded by 6.8%. With global GDP rising by 2.8% at market exchange rates, it was the first year since 2017 – excluding the post-pandemic rebound – where merchandise trade growth outpaced output. In value terms, world merchandise exports increased by 2% to $24.43 trillion, indicating a decline in average export and import prices. Commercial services exports rose by 9% to $8.69 trillion, reflecting strong demand across a range of sectors. - TradeArabia News Service
Gulf Today
17-04-2025
- Business
- Gulf Today
WTO slashes 2025 trade growth forecast, warns of deeper slump
The World Trade Organisation (WTO) sharply cut its forecast for global merchandise trade from solid growth to a decline on Wednesday, saying further US tariffs and spillover effects could lead to the heaviest slump since the height of the COVID pandemic. The WTO said it expected trade in goods to fall by 0.2% this year, down from its expectation in October of 3.0% expansion. It said its new estimate was based on measures in place at the start of this week. 'I'm very concerned, the contraction in global merchandise trade growth is of big concern,' WTO Director General Ngozi Okonjo-Iweala told reporters in Geneva. US President Donald Trump imposed extra duties on steel and car imports as well as more sweeping global tariffs before unexpectedly pausing higher duties on a dozen economies. His trade war with China has also intensified with tit-for-tat exchanges pushing levies on each other's imports beyond 100%. The WTO said that, if Trump reintroduced the full rates of his broader tariffs that would reduce goods trade growth by 0.6 percentage points, with another 0.8 point cut due to spillover effects beyond US-linked trade. Taken together, this would lead to a 1.5% decline, the steepest drop since 2020. 'If we have contraction in global merchandise the concern is spill over into broad GDP growth. We've seen that the trade concerns can have negative spill overs into financial markets, into other broader areas of the economy,' Okonjo-Iweala added. She also raised alarm about the impact on developing countries. The head of the WTO said her greatest fear was that the economies of China and the US were decoupling from one another. The WTO estimates that merchandise trade between them will fall by 81% - a drop that could have reached 91% without recent exemptions for products such as smartphones. 'A decoupling could have far reaching consequences if it were to contribute to a broader fragmentation of the global economy along geopolitical lines to two isolated blocks,' Okonjo-Iweala said. In this scenario, global GDP could shrink by 7% in the long term, which the director general described as 'significant and substantial'. 'The unprecedented nature of the recent trade policy shifts means that predictions should be interpreted with more caution than usual,' said the WTO, which is also forecasting a modest recovery of 2.5% in 2026. 'Forecasting a credible baseline scenario has become virtually impossible,' Hector Torres, a former executive director of the International Monetary Fund, told Reuters. 'The remnants of a deteriorated 'rules-based' trading system are giving way to a capricious 'deals-based' disorder, where any projections hinge on government's capacity to strike bilateral deals with the Trump Administration,' Torres said. Earlier on Wednesday, the U.N. Trade and Development agency said global economic growth could slow to 2.3% as trade tensions and uncertainty drive a recessionary trend. The Geneva-based WTO said disruption of U.S.-China trade was expected to increase Chinese merchandise exports across all regions outside North America by between 4% and 9%. Other countries would have opportunities to fill the gap in the United States in sectors such as textiles, clothing and electrical equipment. Services trade, though not subject to tariffs, would also take a hit, the WTO said, by weakening demand related to goods trade such as transport and logistics. Broader uncertainty could dampen spending on travel and investment-related services. The WTO said it expected commercial services trade to grow by 4.0% in 2025 and 4.1% in 2026, well below baseline projections of 5.1% and 4.8%. The expected downturn follows a strong 2024, when the volume of world merchandise trade grew by 2.9% and commercial services trade expanded by 6.8%. The World Trade organisation says the volume of trade in goods worldwide is likely to decrease by 0.2% this year due to US President Donald Trump's shifting tariff policies and a standoff with China, but it would take a more severe hit if Trump carries through on his toughest 'reciprocal' tariffs. The decline in trade will be particularly steep in North America even without the stiffest tariffs, the global trade forum said Wednesday, with exports there this year expected to fall by 12.6% and imports by 9.6%. The WTO based its report on the tariff situation as of Monday. Initially, 2025 and 2026 were expected to have continued expansion of world trade, but Trump's trade war forced WTO economists to substantially downgrade their forecast, the forum said. Trade in goods worldwide would slump by 1.5% if Trump follows through on his stiffest tariffs on most nations, due to the uncertainty unsettling businesses. Trump suspended the toughest set of tariffs for 90 days earlier this month so more than 70 countries have a chance to address US trade concerns. Meanwhile, he is increasing taxes on Chinese imports to 145% and engaging in a lengthy back and forth with Canada and Mexico about tariffs on their goods. Despite the 90-day pause, 'the enduring uncertainty threatens to act as a brake on global growth, with severe negative consequences for the world, the most vulnerable economies in particular,' WTO Director-General Ngozi Okonjo-Iweala said in a statement. Reuters
