MALAYSIA should take full advantage of its unilateral free trade agreements (FTAs) to further expand market potential and prepare for any possible consequences arising from the United States’ (US) implementation of new tariffs, according to Associate Professor Ahmed Razman Abdul Latiff, Director of the Master of Business Administration Programme at Putra Business School.
Bernama cited Ahmed Razman saying this approach would help Malaysia avoid over-dependence on a few major trading partners, such as the US and China, ensuring more diversified trade relationships.
"Among the free trade agreements Malaysia has signed are the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and Malaysia’s partnership with Brazil, Russia, India, China, and South Africa (BRICS)," he said.
"As ASEAN chair, Malaysia should also take the opportunity to boost trade activities within the region to benefit the country and its fellow ASEAN members."
The impact of the US tariff impositions on Malaysia and other regional nations will become clearer on 2 April when President Donald Trump announces the new tariff rates. The tariffs are part of efforts to address the trade deficit the US has with 15 trading nations.
Of these 15 countries, five are ASEAN members, including Malaysia, Thailand, Indonesia, Vietnam, and Cambodia.
"In the 'dirty 15' list, Malaysia is likely to have one of the lowest trade surpluses with the US," explained Ahmed Razman. "Therefore, if the US were to impose tariffs on Malaysian goods, the rates would likely be minimal or relatively low."
Additionally, he noted that there is still room for the Malaysian government to negotiate with the US to secure an exemption from the tariffs.
The Ministry of Investment, Trade, and Industry (MITI) had previously indicated that the US's imposition of tariffs on countries like Mexico, Canada, and China could present opportunities for Malaysian exporters.
The rising costs of goods from these tariffed countries could make Malaysian products more competitive in the US market, thus benefiting local producers.
MITI highlighted that while the tariffs would not directly impact Malaysian exports, the increased cost of products from tariffed countries would offer an opportunity for Malaysian products to enter the US market as a more affordable alternative.
"Investor countries are also likely to seek new investment destinations and competitive product sources to avoid paying high tariffs," he said.
Reflecting on Malaysia's role as ASEAN chair this year, Ahmed Razman pointed out that the smooth running of ASEAN-related meetings so far would likely have a positive impact on Malaysia's economic, investment, and trade prospects.
He cited the recent projection by Bank Negara Malaysia, which forecasted the country's economic growth to be between 4.5% and 5.5% this year. This growth is expected to be driven by increased domestic economic activity, alongside an influx of foreign investment, particularly from ASEAN countries.
"Although it is too early to fully assess the economic impact of these meetings, the smooth execution of the sessions demonstrates the commitment of ASEAN member countries to boost economic and trade activities within the region," he added. "It is also a clear sign of the confidence ASEAN members have in Malaysia as this year’s chair." – April 1, 2025
