Malaysian exporters brace for impact as US tariff deadline looms

With just a month to go before the US imposes a 24% tariff on Malaysian goods, exporters are warning of devastating consequences

PETALING JAYA, Malaysia (MNTV) — Malaysian exporters have raised alarm over the looming 24% U.S. tariff set to take effect in a month, warning that more than half of the sector could face serious disruptions if a trade agreement is not reached in time.

The Federation of Malaysian Manufacturers (FMM) says about 52% of local exporters expect demand to decline if the United States proceeds with its tariff hike, with nearly half anticipating profit margins to be slashed by over 30%.

Its president Tan Sri Soh Thian Lai warns that such pressures could force some companies, especially those in cost-sensitive sectors like electrical machinery services (EMS), which supports US-linked manufacturing operations in Malaysia, to scale back operations.

“While the full financial impact and potential job losses remain difficult to quantify, FMM cautions that the combined effects of order cuts, shrinking margins and prolonged cost pressures could have serious repercussions for the country’s export-reliant industries,” he says.

In April, the United States offered a 90-day pause to negotiate new country-specific rates based on trade imbalances. The window is expected to close early next month.

Soh adds that even if Washington settled for a lower tariff range of 10 to 15%, Malaysia would still be at a competitive disadvantage compared to countries with preferential US market access, raising concerns over a possible long-term shift in sourcing decisions by American buyers.

Since April 2025, all Malaysian exports entering the United States have already been subjected to an across-the-board 10% tariff, which has added considerable pressure on companies, especially those whose products previously enjoyed low or zero tariffs.

“A further escalation of tariffs would significantly deepen this impact and pose a serious threat to Malaysia’s export performance,” says Soh.

Socio-Economic Research Center executive director Lee Heng Guie says many businesses are still closely monitoring how the situation unfolds.

“What we’ve observed since April is that some local exporters, particularly in the electrical and electronics (E&E) sector, have been front-loading their shipments to the United States to beat the higher tariff deadline,” he said.

Malay Economic Action Council senior fellow Ahmad Yazid Othman says Malaysia needs to accept that tariffs will be imposed. “We hope that the government will do more to spur domestic consumption and be prepared that tariffs will increase.

“As an exporting country, not every sector will be equally affected, which is why we shouldn’t put all our eggs in one basket. We need to diversify and spread the risk by investing in more economic opportunities across other sectors, especially those not reliant on exports. I believe there’s a silver lining in this situation as well,” he said.

The Trump administration’s tariff policy has generated considerable uncertainty in the global economy, shifting current business trends and exporters looking for diversified avenues.