[MALAYSIA] Malaysia can expect to face pressure to boost agricultural imports from the US and align closer to the world’s largest economy as the Southeast Asian nation prepares for a high-stakes meeting with Washington’s trade officials on Thursday.
The upcoming talks are expected to focus heavily on Malaysia’s trade surplus with the US, which stood at nearly $27 billion in 2022, according to data from the US Census Bureau. American officials have repeatedly emphasized the need for “fair and reciprocal” trade, particularly in sectors like agriculture and manufacturing, where US producers have struggled to compete with cheaper Malaysian exports.
US President Donald Trump on April 2 slapped reciprocal tariffs of 24 per cent on most Malaysian goods, part of a broader wave of duties targeting countries he accused of taking unfair advantage of the American economy.
The tariffs have already had a measurable impact on Malaysia’s export-driven economy, particularly in the electronics and palm oil sectors. Industry analysts warn that prolonged trade tensions could disrupt global supply chains, as Malaysia is a key producer of semiconductors and other critical components for US tech firms. Meanwhile, Malaysian palm oil producers are bracing for further volatility, as the US remains one of the top destinations for the commodity.
Although Trump later announced a 90-day suspension of the tariffs – set to expire in early July – the freeze does not apply to China, which now faces duties of at least 145 per cent on its exports to the US.
The exclusion of China from the tariff suspension has raised concerns among Malaysian policymakers, who fear being caught in the crossfire of the escalating US-China trade war. Some experts suggest that Malaysia could leverage its neutral stance to position itself as a mediator or alternative manufacturing hub for companies looking to diversify away from China.
Additionally, the Biden administration’s broader Indo-Pacific economic strategy, which emphasizes stronger ties with Southeast Asian nations, may play a role in shaping the outcome of the talks. Malaysia’s strategic location and growing digital economy make it an attractive partner for the US as it seeks to counterbalance China’s influence in the region.
Domestically, the Malaysian government faces mounting pressure to protect local industries while avoiding retaliatory measures that could harm its own economy. Prime Minister Anwar Ibrahim’s administration has so far struck a cautious tone, emphasizing dialogue and negotiation over confrontation. However, with elections looming, the political stakes of the trade negotiations are higher than ever.
WhatsApp
Instagram
Threads
