Trump imposes 24pct reciprocal tariffs on Malaysia

Summary

• The US has slapped a 24pct reciprocal tariff on products imported from Malaysia.

• Malaysia is at the 11th spot on the list of countries that are getting hit with US tariffs.

• The US has been the second or third-largest market for Malaysian goods, with data indicating that RM240 billion worth of Malaysian products have been exported to the US.

The US is slapping higher tariffs on products that it imports from Malaysia - at 24 percent - as part of President Donald Trump's administration's move to address the republic's trade deficit.

Trump made the announcement from the White House this morning (4am Malaysia time), in an event dubbed as “Liberation Day”.

According to a chart held up by Trump during the announcement, Malaysia imposes tariffs and non-tariff barriers on US goods equivalent to a 47 percent tariff.

In return, the US is retaliating with a 24 percent tariff on imported goods from Malaysia – slightly half the rate that the country allegedly imposed on US goods.

The US has been consistently the second or third largest export market for Malaysian goods, after China and sometimes Singapore.

According to data compiled by the United Nations Commodity Trade Statistics Database, Malaysia exported US$53.85 billion (RM240 billion) worth of goods to the US, more than half of which are electrical and electronic products and their components.

Based on the chart held up by Trump and others distributed by the White House, the new tariffs run as high as 50 percent on Lesotho, 49 percent for Cambodia, and 48 percent for Laos.

US trading partners China, the European Union, and Japan are also hit with tariffs of 34 percent, 20 percent, and 24 percent, respectively.

Goods from countries that are not on the list will be slapped with a 10 percent tariff.

The 10 percent baseline tariff will take effect on April 5, while the higher “reciprocal” tariffs will start on April 9.

However, certain goods will be exempted from the tariffs, such as copper, pharmaceuticals, and, crucially for Malaysia -semiconductors.

The exempted semiconductor products amounted to US$10.08 billion in Malaysian exports to the US last year.

‘Some may get breaks’

Trump had previously said he would unveil a slew of new tariffs on April 2.

However, he announced last week that not all of the threatened levies would be imposed on that date, with some countries getting breaks.

According to a Reuters report, two senior US officials - Treasury Secretary Scott Bessent and top White House economic adviser Kevin Hassett - had explained that the tariffs would focus on countries with the largest trade surpluses with the US as well as those with high tariffs and non-tariff barriers to trade.

Data from the US Census Bureau indicated that the US had a trade deficit in goods of US$1.2 trillion (RM5.4 trillion) last year. Of that, US$24.83 billion (RM111 billion) came from trading with Malaysia, which is the 14th largest deficit in the data.

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