Malaysia’s electronics, electrical sector to be hit most by US tariffs
Country exported integrated circuits, semiconductor devices, broadcasting equipment, electrical transformers, batteries worth $26 billion in 2023
KUALA LUMPUR, Malaysia (MNTV) – The electronics and electrical sector in Malaysia is likely to be impacted the most by the U.S. tariffs, reports Free Malaysia Today.
With the U.S. proposing import duties of up to 24% on Malaysian goods, the country’s exports, especially in the electrical and electronics sector, will be heavily affected.
Malaysia is a crucial player in the global semiconductor supply chain, accounting for 13% of the world’s chip testing and packaging services.
The sector exported $26 billion worth of goods to the U.S. in 2023, with products like integrated circuits, semiconductor devices, broadcasting equipment, electrical transformers, and batteries being highly sought after.
While semiconductors have been exempted from tariffs for now, this reprieve may be short-lived.
The U.S. wants to be self-sufficient in high-end chip manufacturing, which could potentially disrupt Malaysia’s role in the global semiconductor supply chain.
Malaysia was initially hit with a 24% tariff before Trump hit pause for 90 days, imposing instead a baseline tariff of 10%. Still, many are still worried about the impact this will have on their investments.
The other sectors to be hit significantly are machinery and mechanical appliances; lights and furniture; rubber products; and metals.
The machinery and mechanical appliance sector in Malaysia exported about $6.5 billion worth of goods to the US in 2023, which is about 19% of total exports from this sector to the world.
The U۔S۔ is the largest recipient of exports from this sector, followed by Singapore ($5.6 billion) and China ($4.7 billion).
Lights and furniture worth around $1.6 billion were exported to the US in 2023, making up 10% of total exports from these sectors.
In 2023, the rubber sector exported some $1.4 billion to the US – once again, its biggest client, buying 23% of the sector’s total exports.
Malaysia is among the world’s top producers of rubber and rubber-based goods, with gloves being the sector’s biggest exported product.
Metal exports to the US totaled $1.1 billion in 2023, making up 5% of overall exports from the sector. The US is Malaysia’s third-biggest client after China and Singapore.
These metals include aluminum, iron and steel, copper, tin and zinc.
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