PETALING JAYA: Malaysian consumers may face price increases on everyday goods as a result of the new 24% US tariff on Malaysian exports, warned Federation of Malaysian Consumers Associations (Fomca).
Its CEO and secretary-general Dr Saravanan Thambirajah said while the tariff directly impacts exports, its ripple effects would be felt by local consumers as businesses adjust to declining revenue and rising costs.
“Exporters struggling to compete in the US market may try to shift excess stock or production costs to the domestic market.
“Logistics expenses could rise due to decreased export volumes or rerouted trade routes, further driving up prices.”
The products most affected would be those tied to export-driven industries, including electronics, palm oil-based products, rubber goods and processed foods.
For instance, items such as televisions, laptops, washing machines, cooking oil, soaps, medical gloves, tyres and food products relying on imported ingredients may see price hikes.
“The rising cost of essential goods would place a significant burden on middle- and lower-income families, who spend most of their income on food, utilities and education.
“Small price increases could add hundreds of ringgit in additional monthly expenses.”
Saravanan highlighted how an increase of RM30 in groceries, RM20 in utilities and RM15 in school supplies could force struggling households to cut back on nutrition, healthcare and education, worsening financial stress and household debt over time.
While the tariffs do not directly apply to Malaysia’s imported essentials, he warned that indirect effects could lead to supply shortages.
“If manufacturers prioritise exports or reduce local production, the domestic availability of certain goods may tighten, driving prices even higher.”
Fomca urged the government to strengthen the Price Control and Anti-Profiteering Act 2011 to protect consumers.
“The Domestic Trade and Cost of Living Ministry must closely monitor pricing trends, especially for essential goods,” said Saravanan.
He called for the Price Catcher app to be more widely promoted so that consumers can compare prices and report unfair pricing.
He also urged the government to review and adjust ceiling prices for essential items, such as cooking oil, flour, sugar and baby formula, while ensuring regular inspections at supermarkets, sundry shops and online markets.
Fomca advised Malaysians to adopt smart spending habits.
Saravanan stressed the need to reduce reliance on imports, calling for greater investment in local agriculture, urban farming and streamlined farming subsidies.
The Labour Solidarity and Learning Resource Association warned that the tariff, aimed at reviving US manufacturing, might instead harm both US and Malaysian workers.
Over the past decade, Malaysia has benefitted from new investments and manufacturing plants, largely due to the US-China trade war and geopolitical de-risking. This growth has created job opportunities and introduced new technologies to the country.
However, the association warned that the new tariff policy could lead to manufacturers leaving Malaysia, causing factory closures and job losses for thousands of workers.
It questioned whether the tariffs would even create many new jobs in the United States, given the higher production costs that would likely drive up consumer prices.
The association urged the US government to reconsider the tariff policy and seek a win-win solution with the affected countries.
It advised the Malaysian government to rethink its reliance on foreign direct investment, recommending that the Madani government incentivise local industrialists to invest in manufacturing and other sectors, ensuring sustainable job creation within Malaysia.
