KUALA LUMPUR: Malaysian small and medium enterprises are “very concerned” about the potential fallout from US tariffs, with exporters already seeing orders delayed and joint ventures suspended, while non-exporters fear a surge of dumped goods from China that could disrupt the domestic market.
Small and Medium Enterprises Association (Samenta) chairman of international trade Eugene Tan said domestic SMEs that directly export to America are already experiencing disruptions in trade flows and cost pressures.
“The situation is a significant concern for those directly exporting to the US. The tariff represents a direct cost.
“Importers bear the cost, but many American buyers push exporters here to reduce prices to offset the tariff impact. Ultimately, the burden falls back on us,“ he said during a panel discussion at the “Beyond the Headlines on US Tariffs: What’s Next for Malaysian Businesses and the Global Economy?” forum hosted by Hong Leong Bank Bhd today.
Tan stated that the primary concern for SMEs not directly exporting to the US is the broader economic outlook.
He emphasised the risk of a potential slowdown, exacerbated by an influx of dumped goods from China flooding the Malaysian market. “Local SMEs are significantly smaller in scale compared to Chinese competitors. If China begins flooding the market with dumped goods and services, we won’t be able to compete.”
Tan said domestic SMEs are looking at whether Malaysia has regulations in place to protect local businesses from the impact of the dumping. “Is there some kind of regulation to protect the local industry, like the services and retail sectors, which are already feeling the brunt of this kind of goods (and services) dumping?”
Tan confirmed that a slowdown is already being felt, which signals declining trade activity among SMES.
“There has been an immediate reduction in volumes. We are witnessing orders being put on hold, collaborations suspended indefinitely, and joint ventures delayed. Orders have slowed down across the board. Essentially, all the expected challenges are unfolding right now,“ he said.
The government recently announced Skim Jaminan Pembiayaan Perniagaan for the manufacturing sector, but Tan said there was no mention of similar support for the services sector.
“One of the biggest concerns among Samenta members is, ‘What about us?’ Many of them provide services, and the Americans are also cutting back on those. How can we navigate these challenging times if support is only extended to manufacturers and not the services sector?” he said.
Hong Leong Bank group managing director and CEO Kevin Lam said that while the new global trade order presents challenges, it also unveils opportunities for businesses prepared to embrace change and reposition themselves.
He noted that the initial uncertainty following the “new trade world order” that began on April 2 was followed by the dynamism and adaptability of Malaysian entrepreneurs in seeking new avenues and innovative solutions.
“During such challenges, decisive leadership and strategic foresight become indispensable for fostering resilience and entrepreneurial responses to potentially significant shifts in the global environment.
“Our collective responsibility is to proactively equip SMEs with the knowledge, resources, and support necessary to navigate these complexities,“ he said.
