Latest news with #SohThianLai
The Star
09-07-2025
- Business
- The Star
Tough duties ahead for exporters
'CLICK TO ENLARGE' PETALING JAYA: Higher tariffs on Malaysian imports to the United States have left exporters on edge, prompting manufacturers and small firms to urge the government to pursue further talks with the country's largest export market. They also want the government to provide tax exemptions and aid schemes to industries and to help them find alternative markets to mitigate the impact of the 25% tariff on Malaysian goods going to the United States. 'This latest escalation is risking an already fragile industrial landscape, severely impacting export competitiveness and placing additional strain on manufacturers,' said the Federation of Malaysian Manufacturing (FMM) yesterday. FMM president Tan Sri Soh Thian Lai said the sector is already reeling from a 10% tariff that had been imposed earlier and rising cost pressures from the expanded Sales and Service Tax (SST) and new electricity rates. The Federation of Malaysian Business Associations (FMBA) said the most severely impacted industries include electrical and electronics (E&E), medical devices and those making machine components. 'SMEs that supply to larger exporters or are part of the US-linked supply value chains will face declining profits and orders, ultimately affecting jobs and cash flow,' said FMBA vice-chairman Nivas Ragavan. Micro, small and medium sized firms (MSME) who are key players in the supply chains of the commodity-based export sector will also be impacted, said the Malay Businessmen and Industrialists Association of Malaysia (Perdasama). Another small business group, the SME Association of Malaysia, said that firms involved in the global semi-conductor supply chain will be impacted. 'CLICK TO ENLARGE' To overcome these tariffs, Perdasama president Mohd Azamanizam Baharon urged MSMEs to enhance their competitiveness and explore new markets, particularly in Asean, the Middle East and East Asia. 'Perdasama also recommends that the government introduce export support schemes, tax exemptions, or rebates for companies directly impacted by these tariffs so that they may sustain operations and protect jobs,' said Mohd Azamanizam. FMBA's Nivas also asked the government to provide timely updates for SMEs to prepare for shifting global trade dynamics. 'It is critical for Malaysia to position itself as a strategic, agile hub in the global supply chain and to reassure international stakeholders that we remain open for business despite geopolitical headwinds,' he said. Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong urged the government to immediately help local businesses have a 'soft landing'. 'Perhaps the government can come up with incentives similar to how China is assisting their EV market,' he said. While helping local firms deal with the impact, Malay Chamber of Commerce Malaysia (DPMM) president Norsyahrin Hamidon also urged the government to continue negotiating with the United States as the new tariff only goes into effect on Aug 1. 'There is still time for Malaysia to talk to the United States,' he said. Echoing this, SME Association of Malaysia president Dr Chin Chee Seong said Malaysia should press on with talks with the United States despite the fact that the chances of success are slim.
The Star
08-07-2025
- Business
- The Star
FMM seeks swift diplomatic and domestic interventions to counter US tariff impact
Federation of Malaysian Manufacturing (FMM) president Tan Sri Soh Thian Lai KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) has called on the government to intensify its diplomatic and policy response following the United States' announcement of a 25 per cent blanket tariff on Malaysian exports. Its president, Tan Sri Soh Thian Lai, said these efforts must be escalated to secure an immediate deferral of the Aug 1, 2025, implementation and work toward a longer-term exemption or rollback. He said the newly announced 25 per cent blanket tariff, if implemented as scheduled, is expected to intensify these pressures across the board, particularly for companies operating on thin margins or bound by long-term supply contracts. "Malaysia's case must be urgently elevated at the highest levels of US policymaking, supported by strong data and strategic positioning that highlight our value to US supply chains. "At the same time, domestic countermeasures must be rolled out to support affected industries, including targeted financial relief, strengthened export promotion, and fast-tracked structural reforms to enhance cost efficiency and competitiveness," said Soh in a statement today. To support exporters in weathering current shocks and repositioning for growth, he recommended enhancing export facilitation by increasing the Market Development Grant ceiling, removing the Malaysia External Trade Development Corporation (MATRADE) administrative fees for trade missions led by associations, and providing targeted incentives for branding, certification, and digital market access. Soh noted that Malaysia must drive productivity-led growth by accelerating Industry 4.0 adoption through tax incentives, digitalisation grants for small and medium entrepreneurs (SMEs), and low-interest financing for technology upgrades. "These incentives must be backed by workforce upskilling programmes and inclusive access to government support funds, ensuring all firms can participate in the transition. "In addition, foreign worker levy collections should be redirected into dedicated funds to support apprenticeship schemes and high-tech investment," he said. Soh highlighted that Malaysia should lead efforts under its ASEAN chairmanship to establish a regional ASEAN Supply Chain Coordination Council. He said that this will ensure cohesive regional responses to global trade shocks, reduce overreliance on external supply chains and enhance intra-ASEAN production linkages, policy alignment, and supply chain resilience. "At the strategic level, Malaysia must actively expand its trade architecture by accelerating the conclusion of the Malaysia-European Union Free Trade Agreement and intensifying negotiations with new and emerging markets, including in Africa, Latin America, and the Middle East. "A broader and more diversified trade base is essential to reduce reliance on any single export destination and reinforce Malaysia's global competitiveness amid continued external shocks," Soh emphasised. The federation also urges the government to review and reform the Sales and Service Tax (SST) structure by introducing a business-to-business (B2B) service tax exemption for licensed manufacturers, automatically applied upon provision of a valid sales tax licence number. He said the long-term solution must be the creation of a tax framework that fully removes the tax-on-tax element and restores neutrality across the manufacturing supply chain. - Bernama
Free Malaysia Today
08-07-2025
- Business
- Free Malaysia Today
FMM presses govt to urgently secure deferral on 25% US tariff
The Federation of Malaysian Manufacturing said its members were already struggling under a previous 10% US tariff and rising domestic costs. (Bernama pic) PETALING JAYA : The Federation of Malaysian Manufacturing (FMM) has urged the government to secure an immediate deferral of the 25% blanket tariff imposed by the US on all Malaysian products. FMM president Soh Thian Lai said the latest move under the US's reciprocal tariffs, set to take effect on Aug 1, came as a surprise given the intensive and ongoing negotiations coordinated by the investment, trade and industry ministry (Miti). 'This latest escalation risks further destabilising an already fragile industrial landscape, severely impacting export competitiveness and placing additional strain on manufacturers,' he said in a statement. Miti earlier said Putrajaya remained committed to continued engagement with the US on a 'balanced' and 'mutually beneficial' trade agreement despite the announcement of the 25% tariff on Malaysian goods. Soh said manufacturers were already struggling under a previous 10% US tariff and rising domestic costs, including the expanded sales and service tax (SST) and electricity tariff revision. He said feedback from manufacturers during the initial implementation of the 10% tariff already pointed to serious concerns over the sustainability of export operations. 'Many warned that further tariff hikes would result in significant declines in shipments and severe erosion of profit margins.' The 25% tariff, he added, was expected to intensify these pressures, particularly for companies operating on thin margins or bound by long-term contracts. While some critical products such as semiconductors were exempted, Soh noted that the broader ecosystem supporting the semiconductor industry – such as suppliers of parts, machinery and services – remained exposed to disruption. He also expressed concern over Malaysia's growing disadvantage in the evolving tariff landscape, pointing out that Vietnam had secured a bilateral arrangement reducing its rate from 45% to 20%. 'These disparities risk diverting US sourcing to lower tariff alternatives and eroding Malaysia's market share. 'Our compliance record, investment linkages and value-added contribution should form the basis for seeking targeted relief or differentiated treatment to prevent long-term structural damage to Malaysia's export position,' he said. Soh said it was critical that Malaysia's case be urgently and clearly elevated at the highest levels of US policymaking, supported by strong data and strategic positioning to highlight the nation's role in global supply chains. Domestic measures needed Soh also said domestic countermeasures must be rolled out to support affected industries, including targeted financial relief, strengthened export promotion, and fast-tracked structural reforms to enhance cost efficiency and competitiveness. 'The long-term solution must be the creation of a tax framework that fully removes the tax-on-tax element and restores neutrality across the manufacturing supply chain,' he said. Beyond immediate reforms, Soh urged for structural interventions to strengthen trade competitiveness and resilience, including enhanced export facilitation, incentives for branding and digital access, and tax breaks for investments in automation and robotics. 'To build long-term supply chain resilience, a National Supply Chain Council must be swiftly established,' he said, adding that Malaysia should lead efforts under its Asean chairmanship to create a regional Supply Chain Coordination Council.
The Sun
08-07-2025
- Business
- The Sun
FMM urges diplomatic push and domestic reforms to counter US tariffs
KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) has urged the government to ramp up diplomatic efforts and introduce domestic policy measures to counter the impact of new US tariffs on Malaysian exports. The US recently announced a 25 per cent blanket tariff set to take effect on Aug 1, 2025, raising concerns for local manufacturers. FMM president Tan Sri Soh Thian Lai stressed the need for immediate intervention to delay the tariff implementation and secure long-term exemptions. He warned that the new levy would strain businesses, particularly those with tight margins or fixed supply contracts. 'Malaysia's case must be urgently elevated at the highest levels of US policymaking, supported by strong data and strategic positioning that highlight our value to US supply chains,' Soh said. Domestically, he proposed financial relief for affected industries, enhanced export promotion, and structural reforms to boost competitiveness. Key recommendations include raising the Market Development Grant ceiling, waiving MATRADE fees for trade missions, and offering incentives for branding and digital market access. Soh also emphasised the need for productivity-driven growth through Industry 4.0 adoption, supported by tax incentives and digitalisation grants for SMEs. Workforce upskilling and reinvestment of foreign worker levies into apprenticeship schemes were also highlighted as crucial steps. On a regional level, he suggested leveraging Malaysia's ASEAN chairmanship to form a Supply Chain Coordination Council, strengthening intra-ASEAN trade resilience. Additionally, accelerating free trade agreements with the EU and emerging markets was deemed vital to diversify Malaysia's trade base. The FMM further called for a review of the SST structure, proposing B2B service tax exemptions for licensed manufacturers to ease supply chain costs. - Bernama
Focus Malaysia
08-07-2025
- Business
- Focus Malaysia
Where have we erred? FMM urges swift diplomatic interventions to counter 25% US tariff impact
THE Federation of Malaysian Manufacturing (FMM) has expressed deep concern over the latest announcement under the US reciprocal tariffs which will see a 25% blanket tariff imposed on all Malaysian products entering the US market effective Aug 1. This announcement comes as a surprise given the intensive and on-going negotiations between the Malaysian government and the US coordinated by the Investment, Trade and Industry Ministry (MITI) under the National Geoeconomic Command Centre (NGCC) framework. 'The manufacturing sector is already reeling from the earlier 10% US tariff and escalating domestic cost pressures, including the expanded Sales and Service Tax (SST) and electricity base tariff revisions which will most impact the high voltage customers,' lamented FMM president Tan Sri Soh Thian Lai. 'This latest escalation risks further de-stabilising an already fragile industrial landscape, severely impacting export competitiveness and placing additional strain on manufacturers.' Feedback from manufacturers during the initial 10% US reciprocal tariff implementation already pointed to serious concerns over the sustainability of export operations with many warning that further tariff hikes would result in significant declines in shipments and severe erosion of profit margins. 'The newly announced 25% blanket tariff, if implemented as scheduled on Aug 1 is expected to intensify these pressures across the board, particularly for companies operating on thin margins or bound by long-term supply contracts,' warned Soh. 'While some critical products such as semiconductors are exempted, the broader ecosystem that supports the semiconductor industry, including suppliers of parts, machinery and supporting services, remains exposed to significant disruption.' On this note, the vast majority of Malaysian exports including rubber products, textiles, furniture and industrial components will be adversely affected, thus placing added strain on companies already grappling with rising input costs and market uncertainty. 'FMM is particularly concerned by Malaysia's relative disadvantage in the evolving tariff landscape,' asserted Soh. 'Although Malaysia's initial proposed 24% tariff in April 2025 was lower than peers such as Cambodia, Vietnam and Thailand, the new blanket 25% rate places Malaysia in a more punitive position, especially as Vietnam has since secured a bilateral arrangement which reduces its rate to 20%. Editor's Note: MITI will be holding a media conference to address the latest reciprocal tariff rate of 25% on Malaysian exports to the US at 6pm at Menara MITI tomorrow (July 9) following the Cabinet meeting, according to Minister Tengku Datuk Seri Zafrul Abdul Aziz. Tengku Zafrul was speaking to the Malaysian media covering the country's trade mission to three countries – Italy, France and Brazil – led by Prime Minister Datuk Seri Anwar Ibrahim. Compounding the issue, other ASEAN members such as Singapore, Brunei and the Philippines were not named in the latest tariff wave. These disparities risk diverting US sourcing to lower tariff alternatives and eroding Malaysia's market share. 'Malaysia's integral role in US and global high technology supply chains, particularly in electrical and electronics (E&E), medical devices and precision engineering, must be strongly asserted in negotiations,' stressed Soh. 'Our compliance record, investment linkages and value-added contribution should form the basis for seeking targeted relief or differentiated treatment to prevent long term structural damage to Malaysia's export position.' – July 8, 2025 Main image credit: Tengku Zafrul/Facebook
