Kuala lumpur: Malaysia, which is largely an export-oriented nation, must not rely solely on tariff adjustments to boost its competitiveness but also diversify its export base, said economist Nadia Jalil. She also emphasized the importance of strengthening ASEAN as an economic and trading bloc to enhance bargaining power and emerge as the world's third-largest trading bloc, particularly in response to uncertainties stemming from global tariff changes.
According to BERNAMA News Agency, Nadia pointed out that US President Donald Trump's new 15 percent tariffs on America's trading partners could make Malaysia's exports more competitive compared to the 19 percent tariffs under the Agreement on Reciprocal Tariffs (ART) signed between both countries last October. This advantage would depend on Washington imposing similar rates on other countries exporting the same goods to the United States.
In welcoming the new US tariff rates under Section 122 of the Trade Act of 1974, Nadia highlighted that Malaysia should continue diversifying its export destinations and reduce its dependence on the US to strengthen its external resilience. She stressed the importance of lower tariffs for maintaining the competitiveness of Malaysian exports and noted the significance of ASEAN integration in providing greater collective market scale and bargaining power.
Nadia further explained that tariffs primarily function as import duties borne by consumers in the destination country, which means lower tariff levels could help sustain demand for Malaysian goods despite ongoing protectionist measures. However, she cautioned that Malaysia should remain vigilant regarding potential sector-specific tariff developments, especially in key export segments like electrical and electronics, including semiconductors, which are crucial to the country's trade performance.
The economist also emphasized the need for long-term competitiveness through structural upgrades across industries, including moving into higher value-added activities in manufacturing and resource-based sectors like palm oil and petroleum-related industries. These efforts, she said, are essential for maintaining competitiveness beyond tariff dynamics.
During today's parliamentary session, Prime Minister cum Finance Minister Datuk Seri Anwar Ibrahim stated that the government would continue monitoring developments regarding the ART in the US, follow up on actions taken by Trump, and examine various aspects to protect Malaysia's interests. On February 20, 2026, the US Supreme Court struck down tariffs under the International Emergency Economic Powers Act, which had formed the legal basis for Trump's actions, including retaliatory tariffs.
Earlier, Trump reportedly announced plans to raise the global tariff to 15 percent from 10 percent following the Supreme Court's decision to overturn most of his previous trade measures. In a post on his Truth Social on Saturday, the US president indicated that this increase, to be implemented under Section 122, would take effect immediately and exceed existing tariffs.