Prime Minister Datuk Seri Anwar Ibrahim has warned that escalating trade tensions between the United States and China could disrupt Malaysia’s export-driven economy and strain its critical trade and investment relationship with Beijing.
Speaking at the Kelantan state-level Aidilfitri Madani 2025 celebration at Pantai Irama on Friday, Anwar said the US move to impose steep retaliatory tariffs on several countries—including a now-suspended 24% levy on Malaysian imports—signals broader volatility that may destabilise Asia’s trade ecosystem.
“This situation not only affects China’s economy, but also has repercussions for Malaysia,” Anwar said. “When high tariffs are imposed on China, our trade and investment ties with the country are inevitably affected.”
He acknowledged that while Malaysia has temporarily been exempted from the latest US tariff wave, the larger implications of the trade war—particularly on China, Malaysia’s largest trading partner—cannot be ignored.
“As a trading and exporting nation, we are highly vulnerable to global trade disruptions. If China’s export and investment outlook weakens, the ripple effects will reach our shores too,” he added.
US President Donald Trump recently announced a 90-day suspension of higher tariffs on selected countries, including several ASEAN nations such as Malaysia. However, China remains a primary target, with a sweeping 125% tariff still in place.
Previously, Malaysia was hit with a 24% reciprocal tariff, which has now been put on hold. Still, a 10% baseline global tariff continues to apply to all nations, except for China, which faces steeper penalties.
Anwar emphasised that Malaysia must remain vigilant in navigating the shifting trade landscape, especially as it seeks to balance strong diplomatic ties with both superpowers.
“The suspension is welcome, but the underlying threat remains. We must prepare for long-term volatility,” he said.
As the US-China tariff standoff intensifies, analysts expect further fragmentation in global supply chains—posing new challenges for Southeast Asian economies that sit at the crossroads of major trade routes.
