TARIFFS COULD DISRUPT EXPORT-DRIVEN ECONOMY, MICCI CALLS FOR GOVT-INDUSTRY RESPONSE

KUALA LUMPUR, April 4 (Bernama) -- The Malaysian International Chamber of Commerce and Industry (MICCI) warns that the recent imposition of 24 per cent reciprocal tariffs on Malaysian exports by the United States (US) could significantly disrupt the country’s export-driven economy and lead to widespread job losses if not addressed promptly.

MICCI president Christina Tee said in a statement that the tariffs would have far-reaching implications beyond the electronic manufacturing services (EMS) sector, affecting palm oil, medical devices, automotive parts, textiles, and more.

“With over 65 per cent of our gross domestic product (GDP) tied to trade, Malaysia’s economy is vulnerable to such shocks. 

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"These tariffs risk rendering our exports uncompetitive in the US, forcing businesses to reconsider contracts, restructure operations, or even shift production abroad. Many are already operating under pressure from rising input costs, and this adds another layer of strain," she said. 

The chamber estimated that, if left unmitigated, the tariff shock could result in up to 50,000 direct and indirect job losses, particularly across Penang, Johor and the Klang Valley, as well as stagnation in wage growth. 

Key risk sectors include electronics, gloves, and automotive parts, where export linked production volumes may contract significantly, particularly impacting small and medium enterprises. 

Urging that the nation must act swiftly and collaboratively to protect the country's industries, jobs and global competitiveness, MICCI has called for the establishment of a Tariff Mitigation Council, co-chaired by the Ministry of Investment, Trade and Industry (MITI) and MICCI, to lead national-level coordination.

The chamber also recommended the formation of bilateral working groups under the Malaysia-US Trade and Investment Framework Agreement (TIFA), as well as access to technical advisory services for affected exporters.

As part of its proposed five-point national response strategy, Tee said MICCI has outlined some key measures, including a Tariff Cushioning Scheme, Trade Agreement Acceleration, a Harmonised System (HS) Code Defence Taskforce, a US Diplomacy Taskforce, and an Exporter Resilience Fund. 

MICCI has also urged employers to take proactive steps including reassessing supply chains, expanding into new markets, reviewing trade documentation and compliance, and leveraging regional collaborations through ASEAN.

Besides, it offered advice to employers, urging them to adapt now by revalidating supply chains, diversifying customer bases, joining industry advocacy movements, revisiting contracts and classifications, automating and upskilling, and leveraging ASEAN strength.

-- BERNAMA