PETALING JAYA: As trade tensions with the United States escalate, Malaysia stands at a crossroads, not just in terms of immediate policy response but to rethink its long-term role in the global economy.
The situation has prompted broader questions about Malaysia’s economic resilience and its heavy reliance on traditional export markets.
Universiti Teknologi Mara Department of Economics and Financial Studies senior lecturer Dr Mohamad Idham Md Razak said Malaysia must respond with a clear and phased strategy that provide immediate relief, midterm adjustments and long-term transformation.
He warned that without swift intervention, vital sectors such as electronics, palm oil and rubber could face significant losses, while low-income workers and small businesses risk being left behind.
“In the short term, the government must urgently roll out targeted subsidies to protect affected industries while actively negotiating tariff exemptions for critical goods.
“At the same time, we need to divert exports temporarily to untapped, tariff-free markets to cushion the immediate impact.”
Mohamad Idham also called for direct financial support to small and medium enterprises (SMEs), alongside renewed diplomatic efforts to secure fairer trade terms with Washington.
Over the next 6 to 12 months, he said Malaysia could reduce its dependence on the US by strengthening trade ties with Asean neighbours, East Asia and the Middle East.
“We need to broaden our export base and introduce tax incentives to encourage research and development, particularly in automation and sustainable production.
“Building resilient regional supply chains will also be key to reducing long-term vulnerability.
“Malaysia must build a more self-sufficient economy by investing in value-added sectors like renewable energy and digital services while also strengthening STEM education, infrastructure and industrial capacity to reduce reliance on external markets,” he added.
