PENANG does not expect any major retrenchments or shutdowns in the manufacturing sector despite the imposition of a 24% tariff on all goods destined for the United States.
Rather, its investment agency - InvestPenang sees much posturing and reflection during the current three month pause in the sweeping global tariffs.
Although, there were reports that exemptions were accorded to the semiconductor industry which powers Penang's manufacturing base, InvestPenang chief executive officer Datuk Loo Lee Lian said majority of the companies here are studying how best to cushion the impact.
“There are no massive company shutdowns or relocations due to the tariffs imposed, most of them are in discussions to realign their supply chain at this moment,” she told a joint media briefing with Chief Minister Chow Kon Yeow.
Earlier, the duo held a roundtable discussion on strategic response to US tariffs at the state think tank - Penang Institute.
She pointed out that the production output of most manufacturers was planned three to six months ahead so they would not be doing anything hasty for now.
As such, she said there would not be massive unemployment since the companies are rationalising the impact of the tariffs for now.
Exports from Penang to the US make up about 17% which translated to RM76 billion in 2023.
The total exports from Penang to China make up 18% and to Singapore at 15%.
The main items exported are mostly electrical and electronic components.
Chow also announced that a Penang Tariff Monitoring Taskforce will be established to function as a central coordination platform.
The taskforce will track trade developments, engage with affected sectors and inform responsive policy action.
“It will also support our efforts in collaborating closely with federal ministries."
He said the state will work with the federal government to develop a trade adaptation toolkit to help exporters and small medium enterprises.
“This toolkit will include practical resources to help firms tap into alternative markets under regional trade agreements within ASEAN as well as existing ones such as RCEP and CPTPP,” he said.
The RCEP is the Regional Comprehensive Economic Partnership and CPTPP is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Penang will also be working closely with all sides to mitigate what comes forward after the 90 - day pause ends. - April 11, 2025.
