Malaysia’s technology, glove sectors to thrive despite US tariffs
KUALA LUMPUR, Malaysia (MNTV) – Malaysia’s technology and glove sectors are showing strong potential despite the recent 24 percent reciprocal tariffs imposed by the US, New Straits Times reports, citing market research firms.
Malacca Securities said that given that the tariffs imposed on Malaysia are significantly lower than those on other Asean countries and China, Malaysian technology and glove manufacturers could potentially gain an advantage, at least in the near term.
“A weaker ringgit may benefit export-oriented stocks, such as gloves and technology, and benefit the country as a whole due to being labelled as an export-oriented nation,” it added.
Meanwhile, Phillip Research said the tariff differential between China and Malaysia gloves has widened to 80 percent from 50 percent earlier this year, creating a favorable advantage for Malaysian glove makers.
The firm explained that the Chinese gloves entering the US now face a total tariff of 104 per cent, hence the sharp increase in costs for Chinese imports is expected to shift demand towards alternative suppliers, particularly those in Malaysia.
“With the US accounting for 24 percent to 50 percent of total sales for local glove manufacturers, we foresee stronger demand benefiting the domestic glove industry,” it added.
Malacca Securities noted that the collaboration between the Malaysian government and UK-based Arm Holdings is expected to drive growth in the technology sector, potentially boosting local technology firms and attracting greater foreign investment in advanced chip design.
“Also, the KL20 summit and the National Semiconductor Strategy position Malaysia as a prominent player in the global semiconductor industry, which may benefit the technology sector, including electronics manufacturing services players,” the firm said.
Malacca Securities also said that the multinational companies are increasingly diversifying supply chains into Southeast Asia, with Malaysia benefiting from its strong infrastructure and workforce.
“Key sectors like electrical and electronics, electric vehicles and renewables will benefit from sustained foreign direct investment inflows.
“Companies like Google, Nvidia and Microsoft have invested in Malaysia, reflecting growing confidence in the country’s economic potential,” it added.
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