Furniture players urge swift action as US tariff hike threatens furniture exports
The council also called on Putrajaya to suspend recently introduced cost-raising policies, particularly the expanded Sales and Service Tax (SST), and to implement short-term relief measures, including tax deferrals, raw material tax rebates, and export incentives.
'This is a critical moment that calls for empathy and decisive action from the government.
'Businesses are not bottomless automated teller machines to be taxed at will. The private sector is a vital pillar of the national economy and a source of livelihood for thousands,' it said in a statement on Wednesday (July 9).
The US government's sudden tariff hike, the council added, is more than a mere tax increase—it represents a significant blow to Malaysia's credibility and competitiveness in its largest export market.
The MFC revealed that many of its member companies are already facing order cancellations, as overseas buyers begin shifting their sourcing to other countries in response to the rising cost of Malaysian goods.
The furniture industry—largely led by Malaysian-owned enterprises—is one of the nation's most successful manufacturing sectors on the global stage. It also supports a broad ecosystem encompassing timber, logistics, design, retail, and more.
'The new tariff risks triggering a collapse in orders, shrinking production capacity, widespread job losses, and a surge in business closures,' the council warned.
Domestically, furniture manufacturers are contending with a host of new cost pressures, particularly the expanded SST, which now includes raw materials and has directly contributed to increased manufacturing costs.
'In the face of mounting internal and external challenges, the industry is disheartened that government actions appear to be adding to the burden rather than alleviating it,' the MFC added.
Malaysia is set to face a 25% tariff from the United States beginning 1 August.
This is a one-percentage-point increase from the previously imposed 24% rate, which had been paused for 90 days.
Former US president Donald Trump described the new rate as 'far less' than what is needed to eliminate the country's trade deficit with Malaysia.
However, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz has said there is still time to negotiate with the United States before the 25% tariff comes into effect.
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