Group urges govt to rethink foreign investment amid US tariffs

Summary

• The Labour Law Reform Coalition (LLRC) has urged Putrajaya to reassess its economic policy, saying domestic investment is as important as foreign investment.

• LLRC general secretary Gopal Krishnan Nadesan says the US’ 24pct reciprocal tariff may lead to factory closures in Malaysia.

The Labour Law Reform Coalition (LLRC) has urged Malaysia to reassess its reliance on foreign investment following the United States’ imposition of a “reciprocal tariff”, warning that the move harms workers in both countries.

The coalition said the government should incentivise local industries to invest more locally.

“In the long run, the Madani government should provide incentives for local industrialists to invest in manufacturing and other businesses to generate more jobs in the country. 

“Domestic investment is as important as foreign investment,” said LLRC general secretary Gopal Kishnam Nadesan.

He noted that over the past decade, Malaysia has witnessed a surge in new investments and the establishment of manufacturing plants due to the US-China trade war and efforts to mitigate geopolitical risks.

“The phenomenon created more job opportunities for workers and brought new technology to Malaysia.

“The new tariff policy may force some manufacturing companies to move out of Malaysia and cause the closure of factories. Tens of thousands of workers in Malaysia could be terminated because of the irrational move,” he added in a statement.

Severe regional implications

Gopal warned that US President Donald Trump’s announcement would also have severe repercussions for other developing Asian nations, including Cambodia, Indonesia, the Philippines, Vietnam, India, Bangladesh, Sri Lanka, and China.

He pointed out that these countries play a crucial role in supplying affordable products to US consumers.

“It is doubtful how many new jobs will be created in the US due to the higher production cost in the biggest economy in the world.

“But US workers, who are also consumers, will first be hit hard by a higher cost of living as the new tariff will increase the price of products imported from the 24 countries. In fact, developing countries’ cheap products have been helping the US to combat inflation for decades,” he added.

Gopal said the LLRC is urging the US government to reconsider its tariff policy and seek a mutually beneficial solution with the affected countries or economic blocs.

“A trade war will lead to a lose-lose situation for all countries,” he added.

Earlier, the Investment, Trade, and Industry Ministry stated that Malaysia is not considering retaliatory tariffs against the US for increasing import duties on Malaysian goods.

The ministry affirmed its commitment to engaging with US authorities to find solutions “that will uphold the spirit of free and fair trade.”

This morning, Trump announced higher tariffs on dozens of countries to address the US trade deficit. The move resulted in a 24 percent reciprocal tariff being imposed on Malaysia.

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