MALAYSIA’S private sector must take the lead in addressing the impact of US import tariffs, said economist Professor Dr Yeah Kim Leng, who has urged exporters to adapt through strategic partnerships, cost-sharing measures, and diversification of markets.
Commenting on the recent reduction of US tariffs on Malaysian goods from 25% to 19%, Yeah cautioned that despite the downward revision, many exporters remain concerned over reduced price competitiveness in the United States.
“Exporters should now work to minimise any potential decline in demand or a shift to suppliers from countries with lower tariffs,” said Yeah, who is Professor of Economics and Director of the Economic Studies Programme at the Jeffrey Cheah Institute on Southeast Asia, Sunway University.
“At the same time, they should look at leveraging on other Free Trade Agreements such as RCEP and CPTPP and explore non-traditional markets to offset any decline in the US market share.”
He noted that some Malaysian exporters are already absorbing part of the increased logistics costs to maintain cost competitiveness in the US market.
The revised US tariff, announced on Friday, has drawn mixed reactions — viewed by some as a diplomatic success, but met with concern by exporters wary of diminished demand.
Yeah explained that of the 69 countries currently listed under the new US tariff regime, approximately 60% are subjected to a 15% rate. Malaysia, along with Indonesia, the Philippines and Thailand, falls into the 19% bracket, while Vietnam faces a 20% tariff. Laos and Myanmar are facing the steepest rate at 40%.
“There will be little price competition and trade diversion among the five ASEAN countries with similar tariff rates in their exports to the US, but Laos and Myanmar will be seriously disadvantaged,” he said.
He added that the five ASEAN nations may still hold a relative advantage, particularly if the US proceeds with imposing higher tariffs on Chinese goods in future negotiations.
“Nonetheless, the five ASEAN nations, including Malaysia, will be at a disadvantage compared to countries receiving lower tariffs,” he said.
Meanwhile, Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani stated that the 19% tariff would not weaken the global competitiveness of Malaysia’s commodity exports.
“The tariff rate remains competitive compared to other ASEAN countries, including Indonesia, which also faces the same rate,” he said.
“We are almost on a par with the lowest rates in ASEAN. For example, Indonesia is the world’s top producer of oil palm, and we are number two.” - August 3, 2025
