Exporters glad to remain competitive

New Straits Times

14 hours ago

KUALA LUMPUR: The United States' decision to reduce tariffs on Malaysian goods to 19 per cent has been welcomed by industry leaders and business groups as a timely move that could enhance the country's competitiveness in global trade.
The Malaysian Furniture Council (MFC), Federation of Malaysian Manufacturers (FMM) and various export-focused companies said the adjustment, though modest, helps Malaysia better align with regional peers and navigate the challenges of an increasingly cost-sensitive global economy.
Furniture exporters see strategic realignment
Malaysian Furniture Council president Desmond Tan said the tariff reduction brings Malaysia's treatment more in line with that of neighbouring Asean nations, helping preserve its relevance within the regional supply chain.
"Hopefully these latest tariffs can reduce uncertainty. However, exporters will still need to adapt to a higher-cost trade environment and continued support from the government remains valuable," he told Business Times.
On whether the impact will be felt by Malaysian exporters, Tan noted that US importers typically pass some or all of the tariff costs to end consumers or back to exporters through pricing negotiations.
"In the near term, we do not anticipate a significant spike in export volumes as a result of the tariff cut. However, our members are using this window to consolidate operations, strengthen relationships, and prepare for any future shifts in demand," he said.
Small reduction, big impact
FMM president Tan Sri Soh Thian Lai said the six-point cut, while appearing small on paper, holds significance for sectors operating on tight margins or within highly competitive global supply chains.
"The tariff cut enhances the cost competitiveness of Malaysian-manufactured goods in the US market and reflects improved bilateral trade relations," he added.
Soh said the reduction enhances the overall cost competitiveness of Malaysian-manufactured goods in the US market and serves as an important signal of improved bilateral trade relations.
While some may argue that the impact on Malaysian exporters could be limited because US importers bear the tariff cost, he said FMM believes that the burden of tariffs is often shared across the supply chain.
"Therefore, a reduction in tariffs benefits not only Malaysian exporters but also US importers.
"It improves the overall cost equation and can stimulate demand for Malaysian goods, especially in sectors where price plays a crucial role in purchasing decisions," he said.
Palm oil and energy exporters take long-term view
Pacific Inter-Link Sdn Bhd (PIL) chairman and group chief executive officer Datuk Fouad Hayel Saeed Anam called the tariff reduction a positive signal.
He noted that the direct impact may be limited in the near term as the company's growth strategy is more focused on Latin America, Middle East, West Africa and Central Asia.
"However, for the broader industry, especially palm oil exporters targeting the US market, this tariff cut improves price competitiveness and could open up opportunities for processed and specialty products," he said.
He also urged the government to intensify efforts to open up new markets and support sustainability and environmental, social and governance (ESG) compliance to build long-term export resilience.
Opens door for bio-based exports and SME growth
For Glide Technology Sdn Bhd, which specialises in sustainable transformer oils and advanced lubricants, the tariff cut presents immediate commercial potential.
"We see this as a strategic validation of Malaysian-made products. It enables us to fast-track exports of our MPOB-Glide Palm Oil-Ester Transformer Oil and other bio-based fluids to the US market," said its president and founder Datuk Muhazli Muhamad.
Muhazli added that the tariff reduction may encourage more local small and medium enterprises to explore the US as a viable market.
To support long-term growth, he proposed four key enablers including expanded trade financing, tax incentives for ESG-compliant manufacturing, sector-focused trade missions and improved logistics infrastructure.
"Malaysia stands at an inflection point. With the right structural enablers, we can move up the global value chain not just as participants, but as leaders," he said.