Japanese tariff negotiator arranging seventh visit to US
TOKYO: Japan's tariff negotiator Ryosei Akazawa is arranging his seventh visit to the United States for as early as June 26, aiming to end tariffs that are hurting Japan's economy, two Japanese government sources said on Tuesday.
The main focus of the visit is expected to be on US tariffs imposed on Japanese automobiles, which have a severe impact on the Japanese economy. Akazawa will also meet with Commerce Secretary Howard Lutnick and others who oversee this area, one of the sources said.
The meeting would be the first ministerial-level tariff negotiation since the Japan-US summit held in Canada on June 16.
Japanese Prime Minister Shigeru Ishiba and US President Donald Trump agreed to push ahead with trade talks when they met in Canada but failed to achieve a tariff deal.
Last month, Japan's trade negotiator said US defence equipment purchases, shipbuilding technology collaboration, a revision of automobile import standards and an increase in agricultural imports could be bargaining chips in tariff talks.
In a bid to reach an agreement with the US, Japan is also proposing a mechanism to reduce the auto tariff rate based on how much countries contribute to the U.S. auto industry.
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New Straits Times
2 hours ago
- New Straits Times
RMAF must go high-tech to meet evolving threats, say experts
KUALA LUMPUR: The Royal Malaysian Air Force (RMAF) must prioritise technological capabilities, cyber integration and layered air defence to adapt to evolving global conflicts, say defence experts. Chasseur Group security and defence analyst Munira Mustaffa said Malaysia could draw important lessons from conflicts such as the war in Ukraine, where a smaller force has managed to deny air superiority to a more powerful adversary. "Air superiority is no longer about numbers. Ukraine has shown that effective, mobile ground-based air defence systems and strong electronic warfare (EW) capabilities can deny access to contested airspace," she said. Munira was commenting on a statement by new RMAF chief Lieutenant-General Datuk Seri Muhamad Norazlan Aris on Thursday that the air force would adapt its long-term posture based on conflicts involving Russia, Ukraine, India, Pakistan, Iran and Israel. Under the Capability Development Plan 2055 (CAP55), the RMAF aims to enhance relevance by shaping its war-fighting capability to ensure threats are deterred and contained. CAP55, among others, calls for the procurement of unmanned aerial systems, airborne early warning platforms, long-range ground-based air defence radars as well as a ground-based air defence system. Munira said the RMAF should focus on several key areas, including investing in mobile and dispersed air defence systems, enhancing joint air-ground integration, expanding offensive and defensive electronic warfare (EW) capabilities, and building low-cost counter-drone systems using small, attritable platforms. "These drones have proven to be highly effective at a fraction of the cost of conventional platforms. For a country like Malay-sia, they offer lethality at range, economy of effort, and are well suited to our defensive doctrine. "Malaysia's current defence budget of US$4.8 billion, of which US$1.3 billion is allocated for maintenance and new procurement, means the RMAF will have to compete for limited resources across the armed services," she said. Munira also said the RMAF must adopt a phased and cost-efficient strategy that leverages existing assets while introducing new capabilities. "Rather than chasing expensive single-solution platforms, the RMAF should look at layered, interoperable systems. "Upgrading current assets, tapping into dual-use technologies with the Home Ministry, and seeking regional training and procurement partnerships are all viable options," she added. Cyber defence should be treated as the foundational priority, given the increasing dependence on autonomous and software-driven systems. "A cyberattack could compromise multiple systems, undermining both EW and drone capabilities," she said. She added that electronic warfare should come next, as it accounts for the majority of counter-drone operations and plays a crucial role in neutralising near-term threats. While she acknowledged the importance of conventional air power, Munira said the RMAF's future edge lied in integrating new and traditional capabilities. "The objective is to integrate cyber, EW and drone systems into a cohesive, layered defence structure." Meanwhile, Universiti Utara Malaysia defence expert Associate Professor Dr Mohamed Faisol Keling said the RMAF must consider the technological aspects of the current geopolitical conflicts, the influence of major powers and the role of international bodies in conflict resolution. "With a limited budget, focus should be given to more critical sectors rather than areas that can be modified, such as management or lower-cost contracts. "The RMAF should work with various universities and industry players to develop high-technology equipment using local expertise," he said. "Many universities can be brought in to collaborate on developing defence assets that align with our national capabilities. "We can look at how Indonesia is now producing its own defence products through local talent."
Borneo Post
3 hours ago
- Borneo Post
Wrong timing, weak planning: Why businesses are bracing for impact as SST expansion approaches
While aimed at strengthening fiscal resilience, many business associations and industry commentators argue that the move has come at the worst possible time – amid a fragile economic recovery and rising global uncertainties. – Stock photo from Pixabay THE Malaysian government's decision to expand the Sales and Services Tax (SST), set to take effect this July 1, is stirring significant concern across industries as businesses groups sound the alarm on potential impacts on our domestic economy. A tax in troubled times While aimed at strengthening fiscal resilience, many business associations and industry commentators argue that the move has come at the worst possible time – amid a fragile economic recovery and rising global uncertainties. Recent GDP figures reflected this vulnerability as Malaysia's economy grew by 4.4 per cent in the first quarter of 2025, a notable dip from the 4.9 per cent recorded in the final quarter of 2024. The World Bank has also recently revised its 2025 GDP growth forecast for Malaysia downwards from 4.5 per cent to 3.9 per cent, further reinforcing expectations of a slowing domestic economy. Key domestic sectors, including construction and manufacturing, have also begun to slow, while external pressures such as the escalating US-China trade war, US tariffs and escalating geopolitical tensions threaten to further dampen export performance. Amid these headwinds, industry pundits pointed out that the SST expansion risks compounding domestic challenges rather than alleviating them. What's different under 2025 SST expansion? Announced under Budget 2025, the upcoming SST expansion represents a significant widening of the tax base. This includes the expansion of the sales tax to non-essential items such as king crab, salmon, imported fruits, racing bicycles, and antique artworks, while the service tax will now cover a wider spectrum of services such as renting and leasing, construction, financial services, private healthcare, education, and beauty treatments. Finance Minister II Datuk Seri Amir Hamzah Azizan has estimated that the expanded SST will generate RM5 billion in additional revenue in 2025, bringing total SST collection to RM51.7 billion. Of this, RM2.2 billion is expected to come from the sales tax component, while RM2.8 billion from services. Amir Hamzah has emphasized that these changes aim to support government expenditure and social programs without overburdening the lower-income group. Yet, business sentiment seems to paint a different picture. Businesses sound off In a joint statement issued on June 15 by six business associations – the SME Association of Malaysia, Malaysia Retail Chain Association (MRCA), Malaysia Retailers Association (MRA), Bumiputera Retailers Organisation (BRO), Malaysia Shopping Malls Association (PPKM), and the Federation of Malaysian Business Associations (FMBA) have expressed firm opposition to the SST rollout. In particular, the statement criticized the eight per cent service tax on commercial property rentals and leasing services, calling its timing 'gravely misguided'. 'Implementing such a broad-based tax hike amid a fragile recovery will exacerbate inflation, cripple SMEs (small and medium enterprises), discourage investment, and erode consumer confidence,' the consortium said. Already under pressure from cost inflation and sluggish demand, SMEs and retailers who find themselves having to grapple with tighter margins and elevating operating costs may inevitably find themselves having to pass these costs onto consumers which would further reduce household purchasing power and threaten the viability of retail operations. The result, they say, could be widespread downsizing, closures, and job losses – all of which would further weaken the domestic economy. That said, the associations stressed that their opposition is not to the principle of taxation, but rather to the current approach, which they describe as lacking consultation and sensitivity to the current economic realities. Lack of engagement with industries, consumers While the Ministry of Finance had earlier stated that the Royal Malaysian Customs Department was engaging with industry stakeholders to finalise the scope and rate of the tax back in February, the response from many associations suggests otherwise. The Malaysian Iron and Steel Industry Federation (MISIF), for instance, issued a statement on June 20 warning that the SST and the proposed carbon tax would severely undermine the competitiveness of the steel sector especially in the current macroenvironment. MISIF pointed out that over 240 steel-related products – including coking coal, coke, and steel scrap – would be affected. 'These are critical raw materials, and the added cost burden could encourage cheaper imports, discourage local production, and erode Malaysia's manufacturing base.' The association also argued that taxing machinery and equipment contradicts the goals of the New Industrial Master Plan 2030, which emphasizes automation, green steel, and advanced technologies. Moreover, a 10 per cent tax on steel mesh which is widely used in Industrialised Building System (IBS) projects could also slow construction progress, as it shifts contractors away from automation, and increase their reliance on manual labour and foreign workers. Further discord emerged when the Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani, announced that his ministry had called for an urgent consultation with stakeholders in the palm oil and oleochemical industries following negative feedback over the imposition of a five per cent SST on oleochemical products. 'I have instructed the ministry to engage with industry players. We want to know specifically which parts are affected. The SST is a taxation system that has already been implemented in our country. 'When receiving significant negative feedback, I said we should not just react; instead, we need to engage with the industry to understand the impact. If it affects competitiveness, only then will we review it,' he told the media after officiating at the Malaysian Palm Oil Board's Technology Transfer Programme 2025 on June 19. While the move indicates a willingness to engage, it also raises questions about the quality and depth of earlier consultations with stakeholders if such an urgent response had to occur. And the chorus of discontent seems to have continued to grow steadily over the last few weeks with associations like the Federation of Malaysian Manufacturers (FMM), the Malaysian Rubber Glove Manufacturers Association (Margma), the Real Estate and Housing Developers' Association (Rehda), the Association of Private Hospitals of Malaysia, and the Master Builders Association Malaysia (MBAM) all calling for the SST changes to be delayed, revised, or restructured. Even consumers have pushed back with many questioning certain aspects of the SST expansions like the broad inclusion of imported fruits as they argue that many daily staples are imported. To this end, Prime Minister Datuk Seri Anwar Ibrahim announced on June 26 that the government had decided to 'compromise' and exempt apples and oranges, which are consumed by the masses from the SST expansion. 'Tax reform is not the issue, a lack of strategy is' Commenting on the issue, Hedki Heng, a corporate culture researcher and serial entrepreneur, regarded the reform of the SST as 'not an inherently wrong move, but doing so without a well-communicated strategy is just lazy policy, which may erode the people's trust'. 'We're not unwilling to contribute. We just want to know what we're contributing toward. How long must we bear it? Is it worth it? In an age of uncertainty, every government decision builds or breaks public trust,' he said. 'When we voted for a government promising reform, transparency, and hope, we weren't just asking for salary reviews or tax tweaks. We wanted long-term structural change. 'But instead we what we got was policies that change so frequently both businesses and the rakyat can't plan ahead, rising taxes and falling subsidies with no real measures to boost incomes, vulnerable communities being pushed to breaking point, and a 'tax first, aid later' model that contradicts with the intent to help and disconnects people from policy,' he lamented. He argued that his current 'change first, explain later' attitude towards new policies gambled with the trust of citizens, and 'is the true crisis at hand'. 'There is a collapse in public trust. The more policies we have, the less trust we seem to gain. And when hope is betrayed, disappointment becomes even heavier. 'Please don't let this opportunity for reform become another chapter of national disappointment,' he warned. 'So, what can we do to fix this?' Well, for Heng, the answer seems obvious. 'What we desperately need now is a clear medium-to-long-term fiscal roadmap that will tell us exactly how Malaysia's revenue will be sustained, how our economy will be restructured and what our tangible fiscal goals are. 'Once that's done then, and only then, can we move towards introducing new policies that have been thoroughly studied and discussed with industry stakeholders. 'Every major policy must include clear explanations of who will be affected, how the pain will be cushioned, and what support systems are in place. No more trial-and-error policies with no accountability,' he stressed. And finally, Heng also emphasised that for the people to tighten their belts for fiscal reforms, the government must also lead by example by reforming government linked corporations (GLCs) and trim inefficiency. 'A bloated public sector and excessive spending cannot be the rakyat's burden anymore.' businesses focus lead SST tax
New Straits Times
11 hours ago
- New Straits Times
World is going through a new era of conflict escalation
AS India's defence chief attended an international security conference in Singapore in May, soon after India and Pakistan fought what many in South Asia now dub "the four-day war", he had a simple message: Both sides expect to do it all again. However, Indian Chief of Defence Staff General Anil Chauhan denied either nation had come close to the "nuclear threshold", describing a "lot of messaging" from both sides. There have been several dramatic examples of escalation in several global stand-offs over the past two months. Recent weeks have witnessed what is now referred to in Israel and Iran as their "12-day war". It ended last week with a US-brokered ceasefire. As events in Ukraine have shown, conflict between major nations can become normalised at speed — whether that means "just" an exchange of drones and missiles, or a more existential battle. More concerning still, such conflicts appear to have become more serious throughout the current decade, with plenty of room for further escalation. This month, that included an audacious set of Ukrainian-organised drone strikes on long-range bomber bases deep inside Russian territory, destroying multiple aircraft which, as well as striking Ukraine, have also been responsible for carrying the Kremlin's nuclear deterrent. Simmering in the background, meanwhile, is the largest and most dangerous confrontation of them all — that between the United States and China. US officials say Beijing has instructed its military to be prepared to move against Taiwan from 2027, potentially sparking a hugely wider conflict. Addressing senators on Tuesday, America's next top commanders in Europe and the Middle East were unanimous in their comments that the US strikes against Iran would strengthen Washington's hand when it came to handling Moscow and Beijing. Chinese media commentary was more mixed. Han Peng, head of state-run China Media Group's North American operations, said the US had shown weakness to the world by not wanting to get dragged into the Iran conflict due to its "strategic contraction". Other social media posts talked of how vulnerable Iran looked, with nationalist commentator Hu Xijn warning: "If one day we have to get involved in a war, we must be the best at it." On that front, the spectacle of multiple US B-2 bombers battering Iran's deepest-buried nuclear bunkers — having flown all the way from the US mainland apparently undetected — will not have gone unnoticed in Moscow or Beijing. Nor will President Trump's not so subtle implications that unless Iran backed down, similar weapons might be used to kill its Supreme Leader Ayatollah Ali Khamenei or other senior figures, wherever they might hide. None of America's adversaries have the ability to strike without warning in that way against hardened, deepened targets, and the B-2 — now being replaced by the more advanced B-21 — has no foreign equal. In reality, the threat of an overwhelming US military response, and hints of an accompanying switch of US policy to outright regime change or decapitation in Iran, coupled with the Israeli military success against Hizbollah and Hamas, appear to have forced Teheran to largely stand down. What that means in the longer term is another question. Behind the scenes and sometimes in public, US and allied officials say they are still assessing the implications of the success of Ukraine and Israel in infiltrating large numbers of short-range drones into Russia and Iran, respectively, for two spectacular attacks in recent weeks. According to Ukrainian officials, the drones were smuggled into Russia hidden inside prefabricated buildings on the back of trucks, with the Russian drivers unaware of what they were carrying until the drones were launched. Israel's use of drones on the first day of its campaign against Iran is even more unsettling for Western nations. Its drones were smuggled into Iran and, in some cases, assembled in secret there to strike multiple senior Iranian leaders and officials in their homes. As they met in The Hague last week for their annual summit, Nato officials and commanders would have considered what they must do to build their own defences to ensure that they do not prove vulnerable to a similar attack. Judging by reports in the Chinese press, military officials there are now working on the same.
