KUALA LUMPUR: Malaysia would be wise to prepare contingency measures in anticipation of potential US policy shifts and targeted tariffs under a Trump 2.0 administration, said SPI Asset Management managing partner Stephen Innes. He emphasized the importance of diversifying export markets to reduce dependency on the sizable US market as a strategy to insulate the country’s economy from potential risks.
According to BERNAMA News Agency, Stephen Innes suggested that reorienting trade flows, though challenging, could provide Malaysia with a crucial buffer against US policy volatility. He recommended that expanding into emerging markets like BRICS and strengthening regional partnerships could serve as effective strategies to counterbalance any potential fallout. The recent election of Republican candidate Donald Trump as the 47th US president, set to take office on January 20, 2025, has underscored these concerns.
Innes pointed to the potential for renewed US-China trade tensions under a Trump administration, whi
ch could revive hardline policies aimed at curbing Chinese exports and investment flows. This could have a ripple effect across Southeast Asia, where countries like Malaysia maintain tightly interwoven trade links with both China and the US. Disrupted supply chains could stall growth, increasing uncertainty for businesses and markets that rely on stable US-China relations. Furthermore, a Trump administration may push for economic nationalism, repatriating jobs and incentivizing domestic manufacturing, potentially deterring foreign direct investments in Southeast Asia.
The impact on Malaysia could be significant, particularly in key export industries like semiconductors and agriculture. Innes expressed concerns that these sectors might face new tariffs under a Trump 2.0 administration. He noted that the semiconductor industry, vital to Malaysia’s economy, could encounter substantial barriers as the US pursues technological self-sufficiency and national security measures. Similarly, Malaysia’s agricultural exp
orts might be affected if Trump’s policies target nations with trade surpluses. As Malaysia navigates these potential challenges, Prime Minister Datuk Seri Anwar Ibrahim has previously highlighted the country’s stance on US tech sanctions, emphasizing Malaysia’s position as a global semiconductor hub to attract investments amid the technology war between the US and China.
In May 2024, a Malaysian firm faced US sanctions for allegedly shipping electronic parts and components to Russia for use in its war on Ukraine, further highlighting the complexities of international trade relations in the current geopolitical climate.