‘Penang will be hard-hit by rise in export tax'
Between January and May this year, Penang accounted for 55% of Malaysia's total exports to the United States, valued at RM52bil, says Chow Kon Yeow (pic).
The Penang Chief Minister said a substantial share of these exports originated from multinational corporations operating in Penang, primarily shipping finished products or components back to their parent companies in the United States.
'Electrical machinery and equipment constituted 77% of Penang's exports to the United States, with a large share driven by the semiconductor industry,' he said.
Chow said while semiconductors are currently exempted from the tariff, the broader 25% imposition still poses an economic risk.
The new tariff is expected to impact Penang's highly export-orientated economy, which is deeply integrated into global value chains.
He said variations in tariff rates across the Asean region could distort trade dynamics and influence future investment decisions throughout the region.
He added that there was an urgent need for Putrajaya to continuously engage with its US counterparts to negotiate for a lower tariff rate.
'Attention must also be directed towards addressing non-tariff policies and trade barriers to safeguard Malaysia's competitiveness.
'Penang will continue to work closely with the Federal Government and industry players to safeguard the nation's economic interest,' he said.
Chow said Penang has remained committed to improving infrastructure, streamlining processes, and reducing business costs to sustain its role in the global supply chain and ensure long-term economic resilience.
Earlier, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said that the tariff rate announced by the United States was unexpected.
He, however, said there was still time to negotiate before the 25% tariff comes into force on Aug 1.
The rate, stated in a letter posted on US President Donald Trump's Truth Social platform, is 1% more than the 24% imposed previously and paused for 90 days.
Apart from Malaysia, other countries to be slapped with 25% tariffs include Japan, South Korea, Tunisia and Kazakhstan.
Other countries hit with US tariffs include South Africa (30%), Bosnia and Herzegovina (30%), Indonesia (32%), Serbia (35%), Bangladesh (35%), Cambodia (36%), Thailand (36%), and Laos and Myanmar (40%).
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