Malaysia could be highly vulnerable to U.S. tariffs if Trump is re-elected, said OCBC Global Market Research.
Malaysia’s U.S. exports have increased above China’s, heightening tariff sensitivity.
ASEAN countries, including Malaysia, have benefited from “China +1” strategies since U.S. tariffs on China began in 2018.
However, these nations may become targets if Trump follows through on plans for tariffs on all U.S. trading partners.
OCBC has outlined three scenarios. Firstly, under scenario 1, the firm assumes a 60 per cent tariff is imposed on China’s exports to the US.
Under scenarios 2 and 3, OCBC said tariffs are imposed on all trading partners including Asean along with 60 per cent tariffs on China’s exports to the US.
OCBC noted that Malaysia’s diverse export base may offer some resilience, but tariffs could still reduce growth by up to 0.9 percentage points under scenario 2 and 1.5 points under scenario 3.
In scenario 1, Malaysia’s growth impact would be minimal at just 0.2 points.
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