After some time regarding this news, it has finally happened. It was announced that the United States has imposed a 24% retaliatory tariff on imports from Malaysia. President Trump held a conference just yesterday announcing the news.
It's not just Malaysia alone, many countries are affected by the new wave of import tariffs. This includes China (34%), Vietnam (46%), Sri Lanka (44%), Cambodia (49%), Laos (48%), Myanmar (44%) and the European Union (20%). President Trump told the media that these tariffs are not fully reciprocated, although he could do it, but it would be difficult for many countries.
According to Reuters, Malaysia has a trade deficit worth $25 billion. To the uninitiated, a trade deficit means exporting more goods than importing from foreign countries, such as the US. The US is Malaysia's third-largest trading partner, contributing 11.3% of the country's total trade. It is said that the bilateral trade between Malaysia and the US is set to reach RM324.9 billion in 2024.
So what does this mean for Malaysia? Well, in basic economic terms, imposing a tariff means companies that export their goods into a country will have to pay tax to the government. With such a high tariff imposed by President Trump, this will make Malaysian goods more expensive, which could influence companies choosing to pass on some or all of the cost to customers. At the same time, this could help local manufacturers to boost their goods, provide and protect more jobs. However, this could also potentially increase local prices.
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