KUALA LUMPUR: Malaysia must adopt a proactive approach to mitigate risks and capitalise on emerging opportunities as the global trade landscape shifts due to the import tariff hike by the US, said an economist.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the country should expand its free trade agreements (FTAs) by pursuing both bilateral and multilateral trade agreements to strengthen economic resilience. “Engaging with trade blocs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership will ensure continued access to diverse markets,” he told Bernama recently.
Mohd Afzanizam said Malaysia should strengthen its domestic capacity through investments in human capital development, particularly in education, healthcare, and infrastructure, adding that this is crucial to improving Malaysia’s competitiveness. “A well-educated workforce and robust infrastructure will attract foreign investment and enhance economic diversification,” he noted.
In addition, he advised that Malaysia has to enhance its trade diversification by expanding its trade portfolio through engaging in value-added industries, digital economy initiatives, and green energy investments. “This will reduce dependency on traditional manufacturing exports and create new growth avenues in high tech and sustainable sectors,” he said.
Recently, US President Donald Trump announced the imposition of a 25% import tariff on Canada and Mexico, alongside a 10% tariff on China. However, Trump has since agreed to pause the tariff imposition towards Mexico and Canada for 30 days.
Meanwhile, Afzanizam said the US dollar-ringgit exchange is expected to fluctuate between RM4.40 and RM4.50, with immediate support at RM4.45 and resistance at RM4.36.
“A crucial event to monitor is the US Federal Reserve’s response to these developments, as it will shape future monetary policy. The next Federal Open Market Committee meeting scheduled for March 18-19, will provide fresh economic forecasts and markets are likely to experience heightened volatility leading up to this meeting,” he added.
