KUALA LUMPUR: Malaysia will need to shift its own economy to the next level of productivity to remain competitive post-US tariffs announcement as internal reforms are now becoming even more important to the country.
Founding chairman of Malaysia Global Business Forum Nordin Abdullah said the importance of a strategic response beyond a knee jerk reaction will be critical for Malaysia as trade is just one component of the bilateral relationship with the United States.
“Recent investment strategies have targeted many US based firms and the US remains the largest investor in the Malaysian economy,” he said in a commentary piece today.
He said some regional competitors have been given more favourable positions on the tariff spectrum and that may translate into increased inward investments from companies looking to get components of their global supply chains in optimal jurisdictions.
“Trade diversification is going to be an obvious idea but that is now going to be everyone’s first choice of least resistance. That will take us into another competitive scenario, as such more resources will need to be allocated to external trade promotions.
“If Malaysia is able to outdo competitors in this game, the great tariff shakeup could actually be an advantage to Malaysian exporters. This is an opportunity for bold leadership, to summon the courage to step into that breach and to outspend competitors during this time of rapid change.
Beyond the current round of changes, if tariffs do not do the job quickly enough for the Trump administration, he said economic planners need to anticipate what will be put on the table next.
“Detailed scenario planning is critical for export exposed companies and industries. The need to manage rapid changes and avoid a broader crisis is still within our own making,” he said.
Earlier, the Ministry of Investment, Trade and Industry (Miti) said in a statement that the ministry is not considering retaliatory tariffs and is actively engaging with the US authorities regarding the imposed tariff to seek solutions that will uphold the spirit of free and fair trade.
“While respecting such sovereign decisions, Malaysia strongly believes in constructive engagement for mutually beneficial economic relations,” it said.
To mitigate the tariff impact, Miti said, Malaysia is expanding export markets by prioritising high-growth regions and leveraging existing free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership.
“Malaysia will also foster new partnerships within Asean and enhance Malaysia’s supply chain resilience by accelerating the implementation of key industrial policies like the New Industrial Master Plan 2030 and the National Energy Transition Roadmap,” it said. – Bernama
