Malaysia braces for shake-up in supply chains in wake of US tariffs

Sign up now: Get STs newsletters delivered to your inbox

While total trade and exports are rising, Malaysia’s net trade has been on a downward trend since August 2023.

PHOTO: ST FILE

PETALING JAYA – Global and local supply chains are set for a major reshuffle, regardless of whether the US under President Donald Trump moves ahead with new tariffs, according to economists.

Bank Muamalat Malaysia chief economist Mohd Afzanizam Abdul Rashid said the government has done its due diligence and scenario-building exercise in anticipation of the

tariff announcement by the United

“US President Donald Trump’s tariff is beyond the government’s control,” he said on July 7.

“Therefore, (it needs) to be pragmatic on how best to deal with such a problem.”

The government, added Dr Mohd Afzanizam, remains non-partisan but is also exploring all possible opportunities following the upcoming US tariff policy.

“I suppose there will be reconfiguration of the supply chain, and the Covid-19 shocks have taught us well about over-concentration of the supply chain,” he said, adding that the reconfiguration of the supply chain will happen with or without the US tariff.

“The way we see it, the US tariff would accelerate the need to reconfigure the business supply chains.”

On July 4, Mr Trump said the US government will start sending out letters with details of higher tariff rates that will take effect on Aug 1.

Mr Trump said as many as 12 letters will be sent out over the coming days, and the levies will range from “60 or 70 per cent tariffs to 10 to 20 per cent tariffs”, but did