KUCHING: The announcement of reduction of import tariffs by the United States from 25 per cent to 19 per cent on selected Malaysian goods has been described as a turning point for Malaysia’s export-oriented manufacturing sector.
In a press statement today, Kuching South City Council (MBKS) councillor and entrepreneur Eric Tay Tze Kok said the policy shift will significantly enhance the competitiveness of Malaysian products in the US market and bring tangible benefits to local manufacturers and exporters.
“This will bring tangible benefits to local manufacturers and exporters,” he said.
The tariff reduction primarily covers Malaysia’s exports of electronics and electrical (E&E) products, semiconductors, rubber-based goods, machinery, palm oil derivatives, furniture, scientific instruments, medical devices, and other light industrial products. These collectively represent over 55 per cent of Malaysia’s total exports to the US.
Tay noted that Sarawak has been actively developing industrial parks and advancing manufacturing capabilities to attract investment.
“The inflow of foreign enterprises, supported by this tariff cut, could further stimulate talent development and technology transfer, accelerating the state’s overall industrial transformation,” he said.
He urged the federal government to take advantage of this momentum by introducing targeted tax policies to amplify the multiplier effects of the tariff reduction.
“To support this momentum, we need to look at internal structural reforms. Targeted tax policies could amplify the benefits of this external development,” he said.
Tay proposed revising personal tax relief limits to reflect the rising cost of living and encourage spending in sectors that support broader economic activity.
“For example, the current RM2,500 tax relief for lifestyle expenditures is no longer reflective of modern-day living costs.
“Raising the limit to RM5,000 or even RM10,000 could reduce the burden on the middle class while boosting domestic demand and supporting peripheral industries,” he said.
He also recommended increasing the tax relief cap for fitness and wellness expenses from RM1,000 to RM2,000 or more to promote a healthier population.
“The tariff reduction from the US is an external advantage, but the real economic acceleration will come only if it is matched with internal structural reforms, including strategic tax incentives.
“We must capitalise on Southeast Asia’s growing strategic importance and welcome more high-quality foreign investments into Sarawak.
“This US decision may just be the strategic inflection point to bring more global manufacturers to our shores,” Tay added.
