MALAYSIA SHOULD PURSUE DUAL-TRACK STRATEGY ON TARIFFS, BALANCE ASEAN ROLE WITH US - ANALYST

By Nabilah Saleh

KUALA LUMPUR, April 9 (Bernama) -- Malaysia’s leadership role in coordinating ASEAN’s response to the United States (US)’ latest tariff measures should be balanced with direct and strategic engagement with Washington.

Foreign Affairs, Security & Strategy Analyst of Universiti Malaya, Collins Chong Yew Keat, said it is vital for Malaysia to pursue a dual-track approach -- strengthening regional coordination while maintaining pragmatic bilateral ties with the US, which he described as ASEAN’s most important economic and security partner.

“To balance our approach and to protect our national and regional interests, this is the time for us to face the reality that America still remains the most important economic, market, trade and security source that Malaysia and ASEAN still depend on primarily,” he told Bernama International News Service on the implications of the US tariffs for Malaysia and ASEAN.

Elaborating, he highlighted that Malaysia remains a major US investment destination, receiving a combined RM32.8 billion in American investments that helped fuel economic momentum in 2024.

In 2022, net foreign direct investment (FDI) from the US accounted for 43 per cent of Malaysia’s total — more than the combined total of the six largest investors.

“Over 70 per cent of new US investments are from Fortune 500 companies. To date, US businesses have created over 300,000 jobs,” he noted.

Therefore, the foreign affairs analyst called on policymakers to focus on long-term, values-based partnerships that prioritise technology transfer, human capital development, and high-skilled industries -- a shift from Malaysia’s longstanding dependence on low-skilled, extractive sectors.

“Without a focused long-term approach, we lose out from both unreliable economic dependence, and the risks that this pivot will entail with further retaliatory and punitive measures from the US,” he warned.

At the same time, Chong reiterated his opinion that ASEAN must avoid sentimental or knee-jerk responses to the new US tariffs.

He stressed that diplomacy and pragmatism must prevail, warning that symbolic unity alone will not move Washington -- particularly under Trump’s administration guided by strategic trade hardliners.

“Antagonistic and knee-jerk responses, coupled with the bandwagon of misplaced countermeasures, will only invite more wrath from the US.

“We must be wise not to be seen as antagonising in our approach by galvanising joint or common ASEAN solidarity and stance in pushing back against these tariffs,” he said.

He further recommended that Malaysia table a credible counterproposal and reduce its own tariff and non-tariff barriers on American goods.

Despite global calls to diversify economic partnerships via Regional Comprehensive Economic Partnership (RCEP), BRICS, or the Global South, Chong said these platforms remain unable to match the full spectrum of US-led economic, technological, and security structures.

“This new tariff hike has seen knee-jerk reactions throughout the world with threats to impose immediate countermeasures. This remains a foolish move and Malaysia must not join the bandwagon.

“Overdependence on the so-called prospects of the alternative invites greater risks due to the unpredictable resilience and sustaining economic potential of the powers behind the move to dislodge the US-dominated system,” he said.

Highlighting Trump’s approach, Chong described the tariffs as part of a broader reset to correct long-standing global trade imbalances.

He added that a strong, stable, and economically resilient America remains central to Malaysia’s own long-term prosperity and regional security.

“What Trump is doing now is to fairly ask the rest of the world to pay its fair share and to jointly contribute to this global task.

“The tariffs imposed are thus a common-sense measure to stop the bleed, fix the debt, and ensure long-term fiscal discipline and sustainability.

“Remember, a strong, safe, and financially healthy America translates to a strong, safe, and financially healthy world,” he said.

Malaysia is set to dispatch a delegation to Washington by the end of April to initiate dialogue with the US over the 24 per cent reciprocal tariffs imposed on Malaysian goods, Prime Minister Datuk Seri Anwar Ibrahim announced on Tuesday.

Anwar said the move is part of Putrajaya’s “soft diplomacy of quiet engagement”, aimed at exploring possible adjustments to the policy's implementation.

The Prime Minister noted that while there may be limited scope to revisit the underlying intent of the tariffs, Malaysia remains committed to constructive engagement, he said during ASEAN Investment Conference 2025.

“Winds may shift, but we do not drift,” he said, adding that the country’s trade diversification strategy is already gaining momentum.

-- BERNAMA