Malaysia will likely be affected (quite a bit….), particularly in the semiconductor and to certain extend pharmaceutical (due to the lesser volume) industries.
Malaysia Semiconductors Export to US in 2023: at least RM575 billion (Miti)
Malaysia Pharmaceuticals Export to US in 2024: at least RM 302 billion or USD67.97@4.45 (TradingEconomics)
- Overview and Strategic Intent:
- Trump announced 25% tariffs on autos, semiconductors, and pharmaceuticals on February 18, 2025 to protect U.S. industries, reduce trade deficits, and encourage domestic production.
- Part of “America First” policy, continuing from earlier tariffs like 10% on Chinese goods and upcoming 25% on steel/aluminum (March 12, 2025).
- Seeks to address unfair trade practices and strengthen national security in critical sectors.
Autos:
- Tariffs set at “around 25%,” with formal announcement planned for April 2, 2025.
- Targets imports to counter foreign tariffs (e.g., EU’s 10% on U.S. cars vs. U.S.’s 2.5%).
Semiconductors and Pharmaceuticals:
- Tariffs start at 25% or higher, with potential for significant increases over a year.
- Focus on reducing reliance on foreign chips (e.g., Taiwan, South Korea) and drugs, supporting CHIPS Act and supply chain resilience.
- Companies given time to relocate production to U.S.
Implementation Timeline:
- Auto tariffs detailed in April 2025; semiconductor/pharma tariffs less certain but phased.
- Coincides with other tariffs (e.g., steel/aluminum on March 12, 2025, delayed Canada/Mexico tariffs).
Reactions:
- Industry: Autos sector fears price hikes and supply chain disruption; semiconductors/pharma firms assess relocation costs (Reuters, CBS News).
- International: EU, Canada, and China criticize tariffs, potential for retaliation
- Public: Mixed — Fear of inflation and market instability and some support “buy American”.
Economic and Geopolitical Impacts:
- Could raise consumer prices domestically but may create jobs; risks trade wars and supply chain issues.
- Geopolitical tension with allies and rivals, prompting countermeasures (e.g., China’s rare earth controls).
- Strategic goal: rebalance trade, but WTO and business groups caution about global market risks.
Related News: The Edge Malaysia, 19 Feb 2025
Other similar post – Trump US Reciprocal Tariffs, 3rd April 2025
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