KUALA LUMPUR: Malaysian glove makers are among the top gainers today as the American tariff differential widens between Malaysia and China exports to the United States (US), which stands at 24 per cent and at least 54 per cent, respectively.
As of 10.36 am, Hartalega surged 19 sen to RM2.05, Kossan Rubber jumped 16 sen to RM1.80, Supermax advanced 8.0 sen to RM11.19, and Top Glove went up six sen to 86.5 sen.
US President Donald Trump announced a sweeping range of reciprocal tariffs and signed an executive order imposing 24 per cent and an additional 34 per cent tariffs on imports from Malaysia and Chinese goods effective April 9, respectively.
The additional 34 per cent tariff on China was on top of the 20 per cent he previously imposed, bringing the total new levy to 54 per cent.
Separately, Thailand and Indonesia were slapped with reciprocal tariffs of 36 per cent and 32 per cent, respectively, which are expected to hit glovemakers there as well.
“We are neutral to positive on this latest development, as overall, Malaysian glove makers are still net positive. Factoring in more than 100 per cent tariffs imposed on China medical gloves in 2025-2026, the pricing gap between Malaysian and Chinese producers for US exports is still wide.
“Hence, there should be no changes to the current industry landscape for US markets,” said Kenanga Investment Bank Bhd in a research note today.
The investment bank said the latest additional 34 per cent tariff imposition on China was in addition to the 60 per cent presently imposed on China’s rubber medical and surgical glove exports into the US.
Kenanga Investment Bank said the net effect was positive for Malaysia as any volume loss in non-US markets could be offset by higher demand from the US considering that the US historically accounted for 35 per cent to 40 per cent of Malaysia’s total glove volume.
“We believe that given the current geopolitical tensions between the US and China and the tariff hike, American buyers are less likely to source most of their supplies from China.
“Some buyers have already begun shifting their purchases to Malaysia as a risk management strategy, which could potentially benefit Malaysian players including Hartalega, Kossan Rubber, Top Glove and Supermax,” it added.
The investment bank said that in terms of expansion, Chinese players were exploring capacity expansion in other Asean countries, including Indonesia, Vietnam and Thailand.
“Anecdotal evidence suggests that the loss of US sales by the Chinese glove makers will cap average selling price (ASP) upside in the non-US markets for Malaysian producers since supply is expected to be flooded there.
“Based on channel checks, Chinese glove makers’ break-even ASP is expected to be between US$14 per 1000 pieces to US$17 per 1,000 pieces (US$1=RM4.45), which imply that continuous unwarranted dumping of ASP could potentially lead to losses,” it added.
