Malaysia rolls out moves to soften US tariff impact, eyes market diversification: minister
Its minister for investment and trade says Kuala Lumpur would not impose reciprocal tariffs and prefers entering into talks with the US
[KUALA LUMPUR] Malaysia is ramping up trade safeguards and efforts in market diversification to cushion the potential fallout from the US tariffs, said Minister of Investment, Trade and Industry Tengku Zafrul Aziz on Monday (Apr 14).
Speaking after a meeting of the National Geoeconomic Command Centre (NGCC) chaired by Prime Minister Anwar Ibrahim, Tengku Zafrul said Malaysia remains economically stable, but is implementing countermeasures to protect its trade and industrial base.
Among the steps announced are the enforcement of anti-dumping duties, countervailing taxes and safeguards to shield domestic industries from redirected exports stemming from global trade tensions.
The government will also intensify market diversification and target the exports of electronics, petroleum products, palm oil and processed foods at new and emerging markets, particularly those in the now-10-member Brics grouping, as well as those in South America and Africa.
Tengku Zafrul said: “The current situation remains fluid and uncertain. The US position appears to shift daily… We are monitoring developments and taking proactive steps to protect Malaysia’s strategic economic interests.”
Diversified trade portfolio
Although the US is one of Malaysia’s key trading partners, it accounted for just 11.3 per cent of total trade in 2024, underscoring the country’s relatively diversified trade portfolio.
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“This means 88 per cent of the global market remains open to us, ... but we must also acknowledge the interconnected nature of global supply chains. A disruption in one market can trigger a domino effect across multiple economies, including Malaysia,” he added.
To enhance the country’s export competitiveness, the government is expanding its export support programmes, including the Market Development Grant (MDG) and the Empower Trade Association (ETA) initiatives.
The MDG has generated RM20 billion (S$6 billion) in export sales to date, with a return of RM660 for every RM1 invested. The ETA programme, which focuses on new markets such as Kenya, South Africa and Poland, has contributed another RM10 billion.
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Another programme, the Global Sourcing Programme (GSP), continues to attract multinational buyers, especially in the electronics and medtech sectors.
On the domestic front, Malaysia will also strengthen its local sourcing and supply chain resilience through structural reforms under the New Industrial Master Plan 2030 (NIMP2030).
“All these efforts aim to reduce the impact of the US tariffs by helping Malaysia’s small and medium-sized enterprises to diversify and expand into new markets,” Tengku Zafrul said.
Investors’ sentiment
Turning to investment sentiment, he noted that major foreign investors remain committed to their expansion plans in Malaysia despite the evolving trade landscape. However, some smaller firms have expressed concerns and are adopting a wait-and-see approach amid the ongoing uncertainty.
“The government acknowledges that it must act swiftly, while remaining agile in adapting to evolving global developments,” he said. “Our goal is to minimise short-term disruptions while strengthening Malaysia’s long-term economic resilience.”
The minister reaffirmed that Malaysia would not impose reciprocal tariffs on US imports, and emphasised the government’s preference for engagement and negotiation to lower tariff rates and broaden the exemptions for Malaysian exports.
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