Kuala Lumpur: Malaysia’s maritime sector, including its ports, is not immune to the fallout from the tariff war, which can potentially deal a death blow to small companies if the cost of shipping cargo increases exorbitantly.

According to BERNAMA News Agency, well-known maritime industry analyst Nazery Khalid highlighted that if high tariffs are implemented after the 90-day pause, large importers may be able to absorb the extra costs, but smaller firms lacking liquidity risk financial ruin. This could potentially leave goods stranded at ports, jeopardizing smaller companies financially and leading to cargo pile-ups and costly detention charges, further burdening ports and maritime supply chains.

There is deep concern regarding the potential business downturn at Port Klang and Port of Tanjung Pelepas, which are ranked among the world’s 20 busiest container ports and are deeply engaged in moving cargo globally. The escalating tension between economic superpowers the United States and China, arising from tit-for-tat tariffs, has triggered negative ripple effects across the globe, severely affecting global maritime trade. Malaysia, being a highly trade-dependent nation, cannot escape the repercussions from the hike in US tariff rate to 24 percent.

The shipping industry, already hit by COVID-19, volatile oil prices, and global tensions, is now grappling with rising shipping costs, port congestion, and a fragile supply chain. The tariffs could also disrupt long-established manufacturing networks, with smaller manufacturers potentially losing critical overseas suppliers due to financial strain.

Nazery explained that importers with deep pockets will pay the extra tariffs in addition to additional levies, but small companies without sizeable cash or liquidity will not pick up the goods, leaving them stranded at ports. This situation will result in cargoes being taken back to the ports of origin by the exporters or suppliers, or the goods will remain at the ports of destination, causing ports to impose costly detention charges on importers. This scenario will lead to cargoes being stuck and eventually piling up at ports, burdening the ports and causing strains along the maritime supply chains.

Once again, analysts note that the shipping industry finds itself in a situation demanding ‘all hands on deck.’ The tariff war is the most significant geopolitical development affecting the global economy, while the industry is still reeling from the heavy blow dealt by the COVID-19 pandemic, compounded by ongoing geopolitical tensions, volatile crude oil prices, and fluctuating freight rates.

Nazery also noted that US companies manufacturing abroad affected by the tariffs will not automatically embark on reshoring despite the rather protectionist measures undertaken by their government. Instead, they might seek countries with lower tariff regimes, which could provide countries like Malaysia an opportunity to attract US manufacturing companies to its shores with various incentives and favorable conditions.

Westports Holdings Bhd reported that tariff rates among key global trading nations have escalated to unprecedented levels, and the resulting inflationary pressures could curtail consumers’ purchasing power and consumption, elevating the risk of an economic slowdown or even a recession in major trading nations. Lower containerized trade could emerge as a near-term impact, but regional trade realignment and Asia’s economic dynamism could partially mitigate the downward pressure on container volume.

Suria Capital Holdings Bhd managing director Datuk Ng Kiat Ming stated that Sapangar Bay Container Port (SBCP) has not experienced any negative effects from the tariffs and recorded a positive performance in the first quarter of 2025, with throughput volume rising 11 percent year-on-year for the January-to-March period. March 2025 saw a 23 percent increase in volume compared to the same month last year, reflecting a healthy surge in regional shipping activity, largely driven by intra-Asia trade and the increasing presence of regional shipping lines calling at SBCP.