KUALA LUMPUR: The latest United States (US)-China tariff rollback will impact Malaysia’s glove makers, delaying purchasing decisions due to ongoing uncertainty, said Maybank Investment Bank Bhd (Maybank IB).
In a note today, the investment bank said reversing the previous tariff schedule on China-made gloves hinges on ongoing negotiations.
“While the temporary tariff rollback may not lead to a more competitive rate for Chinese glove makers, lingering uncertainty could prompt customers to adopt a wait-and-see approach, delaying purchasing decisions and slowing sales.
“More critically, new capacity from Chinese glove makers in Southeast Asia, expected from 2026, poses supply risks that may pressure volume and average selling prices,” it said.
The US and China have agreed to reduce tariffs for 90 days. Under the May 12, 2025, the US will cut the tariff imposed on China imports in April 2025 from 145 per cent to 30 per cent.
China will lower tariff on US goods to 10 per cent from 125 per cent, with revisions effective from May 14 to Aug 12, 2025.
Hong Leong Investment Bank Bhd (HLIB) said Chinese nitrile glove makers are unlikely to recapture US demand from Malaysia and Thailand despite the weekend outcome due to persistent high landed price disadvantages.
For context, Chinese glove makers sold generic medical nitrile rubber gloves at US$15 per 1,000 pieces before the April 2, 2025 tariff but on “landing” in the US, this shoots up to US$44.25 with 195 per cent US tariff, versus Malaysia/Thailand’s US$17.6-18.7 with a 10 per cent US tariff.
After the recent tariff reductions, the landed price of Chinese medical nitrile rubber gloves is expected to drop to US$27 with an 80 per cent US tariff, still uncompetitive against Malaysian/Thai alternatives.
Chinese vinyl gloves were selling at US$9-10 per 1,000 pieces before the April 2025 tariff. With the 145 per cent tariff previously in place, the “landed price” was US$22 to US$24.50, still higher than Malaysian/Thai generic nitrile rubber gloves alternatives.
However, under the new 30 per cent tariff agreed between China and US over the weekend, vinyl’s landed price is expected to fall to US$11.7 to US$13, a significant recovery from their non-competitiveness against Malaysian/Thai nitrile rubber gloves.
Hence, vinyl’s lower “landed price” could result in a demand shift from vinyl to nitrile rubber gloves, which would help absorb excess supply from China’s largest glove producer, HLIB said.
On a positive note, it said there is still potential for a gradual demand shift away from vinyl to nitrile rubber gloves by US buyers – mainly benefiting Malaysian producers – should the ongoing 90-day tariff negotiations between the US and China conclude unfavourably.
“Notably, the current tariff reductions remain fluid and subject to change. This shift from vinyl to nitrile could help absorb the additional rubber glove capacity coming from China’s largest glove producer Intco Medical.
For context, China has 70 to 75 per cent of the US vinyl glove market.
Meanwhile, CIMB Investment Bank Bhd believes US buyers will take a “wait-and-see” approach, resulting in softer demand and lower purchase volumes for Malaysian glove makers — a situation expected to persist until June 2025.
It maintains a “neutral” rating on the sector.
