LET’S not sugarcoat it – the U.S. is throwing its weight around; other countries are paying the price. Including ours.
Under “reciprocal tariffs”, Washington has rearmed its trade policy. But let’s be honest: it’s less about fairness and more about flexing economic muscle.
In doing so, not only is Washington risking its own economic influence, but also losing its supposed superpower status.
While the U.S. claims it’s responding to “imbalanced trade”, the reality is that smaller economies like Malaysia are being dragged into a trade war we didn’t start – and never wanted.
Key exports under siege
The Federation of Malaysian Manufacturers (FMM) has warned that key exports such as gloves, plastics, electrical and electronic goods will be seriously impacted by the 24 per cent reciprocal tariff to be imposed by the U.S.
FMM president Tan Sri Soh Thian Lai said the full 24 per cent rate on these products could sharply reduce exports, put pressure on jobs, and force local producers and U.S.-linked multinationals based in Malaysia to adjust their supply chains.
“The broader ecosystem, including suppliers, logistics providers and downstream service sectors, could also be adversely affected by shifts in sourcing and manufacturing decisions resulting from the tariff,” he said in a statement.
This isn’t just about numbers. It’s about jobs. Families. Futures. And it’s all because Washington wants to make a political point on trade.
Hypocrisy on “free trade”
Here’s the bitter irony – for decades, the U.S. preached free trade. Now it’s weaponising tariffs.
When it suited Washington, it championed open markets. But the moment other nations started catching up – offering competitive pricing, efficient manufacturing and regional alternatives – suddenly it’s a problem.
Malaysia, like many ASEAN countries, has played by the rules. We’ve invested in quality, upgraded our standards and complied with regulations. And yet, here we are – penalised for being successful.
SMEs, many of which rely on export contracts and supply chain links to larger multinationals, are starting to feel the heat.
When the big players pull back, the whole ecosystem suffers. The message is clear: Malaysia can no longer afford to place too much faith in markets that turn protectionist overnight.
Not only is this not sustainable, but the volatility it brings might be the push needed for an alternative market.
Questions linger on whether this policy would have been adopted by a Democratic administration.
I can see the media flaying Biden or Obama had this happened during their tenure, but under Trump, it appears that there is hypocrisy in defending the move.
Let’s get this straight. This isn’t merely inward-looking or being conservative, it hurts the U.S. just as much as it hurts others.
Indonesia’s warning sign
Look at what’s happening next door. Indonesia – Southeast Asia’s largest economy – is starting to stutter.
Growth has slowed. Export numbers are dipping. Investment confidence is shaky. The mighty consumer market that once powered regional optimism is looking more cautious.
Inflation is creeping in, the rupiah is under pressure and essential goods are getting more expensive for the average Indonesian.
Indonesia Centre for Economic and Law Studies executive director Bhima Yudhistira projected that sectors such as automotive, electronics, apparel and textile would be hit hard.
On Thursday, the rupiah fell to a new low. It is now 16,754 rupiah per US dollar, marking its lowest in 27 years since the 1998 financial crisis.
Three-pronged strategy
In the face of US trade aggression and slowing global demand, ASEAN can no longer afford to play it safe.
It’s time we get serious about our regional economy. The ASEAN Economic Community (AEC) has been discussed for years – but talk isn’t enough. We need action.
Why are intra-ASEAN trade flows still below 25 per cent? Why do we continue to depend so heavily on the U.S., China, or the EU when we have over 600 million people right here in Southeast Asia?
Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz in October last year has outlined a three-pronged strategy, the first is to fully explore trade potential with strategic and emerging economies.
Secondly, to ensure stronger intra-ASEAN trade, its 10-member bloc must continue its efforts to remove trade barriers and avoid inward-looking policies.
Thirdly is to be more agile by focusing on developing robust mechanisms to manage economic volatility, investing in future-oriented industries, and strengthening regional collaboration.
Reinforce regional trade
The Regional Comprehensive Economic Partnership (RCEP) is a start, but it can’t be the endgame. RCEP provides a framework aimed at lowering trade barriers and securing improved market access for goods and services for businesses in the region.
Real ASEAN integration means putting our interests first – not waiting for the next round of tariffs to hit before reacting. This provides ASEAN with alternative markets, reducing reliance on the U.S. and shielding economies from trade disruptions.
Similarly, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CCTPP) is another avenue that can be leveraged.
Malaysia, in response to the reciprocal tariff on its exports imposed by the U.S., said it will not resort to retaliatory measures. Instead, it will continue to engage U.S. authorities through bilateral frameworks such as the Trade and Investment Framework Agreement (TIFA).
To evaluate the potential fallout from the tariff hike, Malaysia will rely on the newly formed National Geoeconomic Command Centre (NGCC), chaired by the prime minister and supported by the Ministry of Investment, Trade and Industry (MITI).
We won’t be bullied
If the US wants to play hardball, so be it. But Malaysia – and ASEAN – must stop playing defence.
Diversify exports. Strengthen South-South ties. Deepen trade with Indonesia, Vietnam, Thailand, and the rest of the region.
We can no longer count on the goodwill of superpowers which shift their policies with the political winds.
Does the U.S. want to look inward? Fine. We’ll look around – and build stronger bridges with our neighbours.
The message to Washington should be clear: We won’t be bullied. And we won’t be waiting around.
The views expressed here are those of the writer and do not necessarily represent the views of Sarawak Tribune. The writer can be reached at nazmixsuhaimi@gmail.com.
