6 days ago
- Business
- New Straits Times
Compete to keep core US market
LET us be clear: talk of replacing the United States as a core market is not grounded in reality.
It is political theatre with no basis in trade math. In 2024, the US imported US$3.35 trillion worth of goods (UN Comtrade 2024).
That single market outweighs entire continents - more than the entire Gulf Cooperation Council (US$903 billion), all of Latin America and the Caribbean (US$842 billion) or the whole African continent (US$725 billion).
Individually, countries like Brazil (US$277 billion), South Africa (US$123 billion), Egypt (US$86 billion) and Argentina (US$60 billion) may look promising on paper, but even combined, they cannot replicate the demand scale, institutional certainty, or logistics depth of the US.
This is not about sentiment. It is about volume, purchasing power, and market depth.
The US economy continues to set global standards for high-value consumption. Its supply chains, regulatory systems, and buyer networks are deeply integrated into global trade.
For Malaysia, the US remains a critical destination for key exports such as semiconductors, medical devices, palm oil derivatives, solar cells, and automotive components.
A hypothetical 10 per cent tariff on Malaysia's electrical and electronics exports could disrupt over RM15 billion in trade and impact more than 200,000 downstream jobs (currently exports of semiconductors and certain electronic components remain tariff-free).
To argue that Malaysia can simply pivot away is to ignore the basic geometry of global commerce.
You do not abandon the largest buyer on the planet unless you have a larger one to replace it. And there isn't one.
Other Countries Are Moving Ahead - Fast
While we are debating illusions of economic nationalism, others are making hard deals.
The European Union (US$6.86 trillion in imports), the United Kingdom (US$815 billion), Japan (US$742 billion), and South Korea (US$631 billion) have already secured tariff arrangements with the Trump administration (World Bank 2024; WTO Notifications Archive).
These markets collectively represent over US$10.2 trillion in import demand and a combined population of 1.19 billion.
Crucially, these are high-income nations - with GNI per capita ranging from US$35,000 to nearly US$49,000. This is where premium demand exists for precision electronics, certified halal food, sustainable packaging and advanced green technologies.
Malaysia is now on the outside looking in. Our competitors notably Vietnam, Thailand, and Singapore have moved quickly to ensure continued preferential access.
Vietnam has signed comprehensive trade deals with both the US and EU. Singapore has executed digital economy agreements with global partners. Indonesia is building strategic economic corridors across the Indo-Pacific.
While they are building bridges, we are still arguing about whether the water is too deep.
If Malaysia fails to catch up, we will be left out - not because of any bias against us, but because others were faster, clearer, and more committed.
This shift is also taking place amid a broader fragmentation of global trade, a bifurcation accelerated by the war in Ukraine, Middle East volatility and rising technology nationalism.
In such a divided world, trade access is no longer guaranteed by WTO norms alone. It must be negotiated, secured, and continuously defended.
Asean Is Not a Safety Net - It's a Race
Even within Asean, Malaysia is no longer the undisputed leader in trade diplomacy or investment attractiveness.
Indonesia, Vietnam, the Philippines, and Singapore now account for a combined US$1.2 trillion in imports and a population of 504 million.
These countries are strengthening their own regional ecosystems, attracting supply chain relocations and digitising trade processes faster than we are.
The notion that Malaysia can fall back on Asean as a captive market is mistaken. Asean is not a safety net. It is a race.
The premium export markets of the future will be digital, rules-based, and increasingly green. They will demand clarity on carbon content, labour standards, origin rules, and IP compliance.
Countries that meet these standards will get lower tariffs, faster clearance, and better capital flows. Countries that don't will face hidden costs - regulatory delays, border holds, and loss of competitiveness.
Malaysia is now at a fork in the road. Either we play at the top end of global trade or we settle for being a volume supplier to second-tier markets with lower returns and higher risk.
Conclusion: Either We Are at the Table Or We Are on the Menu
This is not the time for romanticism. It is time to look at the numbers and act accordingly.
No serious economy can walk away from a US$3.35 trillion market. No government should risk being left behind while others negotiate preferential access to the world's richest consumers.
Malaysia must stop imagining substitutes that do not exist and start negotiating harder for access to markets that matter.
Trade is strategy. Either we are at the table shaping the rules, or we are on the menu, priced and picked apart by those who did.
*The writer is an economist, adjunct lecturer at Universiti Teknologi Petronas, international relations analyst and a senior consultant with Global Asia Consulting. The views expressed in this op-ed are entirely his own.
