The economic policies of Donald Trump’s potential presidency could add up to RM19.7 billion to Malaysia’s GDP, according to global property firm IQI.
Benefits but Risks Remain
“It’s too early to predict the exact policies President Trump and the Republican-led Congress will implement,” said Juwai IQI Co-Founder and Group CEO Kashif Ansari. “However, based on the first Trump presidency and his cabinet choices, we anticipate key trends.”
One pivotal policy is the intensification of tariffs on Chinese goods, expected to accelerate the shift of manufacturing out of China to Southeast Asia. For Malaysia, this could add 1% to GDP over four years, equivalent to RM19.7 billion—about 40% of the East Coast Rail Link’s cost.
The IMF projects Malaysia’s 2024 GDP at US$440 billion. A 1% boost translates to US$4.4 billion or RM19.7 billion at current exchange rates.
Risks to Consider
Ansari highlighted risks such as rising U.S. inflation potentially driving up interest rates, which could attract capital away from Malaysia and strengthen the U.S. dollar, raising costs for Malaysian manufacturers reliant on imports.
Trump’s China Tariffs Benefitted Malaysia
During Trump’s first presidency, tariffs on Chinese goods significantly benefitted Malaysia. From 2017 to 2021, Malaysia’s foreign direct investment (FDI) from China and Hong Kong nearly doubled, climbing from 9% to 15.2% of total FDI.
The “China Plus One” strategy, where companies diversify manufacturing outside China, saw Malaysia receive over US$4.4 billion in Chinese investments—nearly double Thailand’s share. By 2023, China and Hong Kong were sending RM15.98 billion annually in FDI to Malaysia, triple the level from a decade ago.
U.S.-Malaysia Trade and Economic Growth
Trade between Malaysia and the U.S. thrived during Trump’s first term. In 2021, Malaysian exports to the U.S. hit US$56.2 billion, a 27.3% increase from the prior year, with a trade surplus of US$41 billion.
Malaysia’s economy grew steadily during Trump’s first presidency, with annual growth of 5.8% in 2017, 4.8% in 2018, and 4.5% in 2019, before the pandemic-induced contraction in 2020.
Indirect Benefits to Malaysia’s Real Estate Market
Trump’s first presidency had minimal direct impact on Malaysia’s housing market, aside from supporting economic growth, which gave consumers more spending power. House prices grew 6.5% in 2017 but slowed to 1.2% by 2020.
Over the next four years, Juwai IQI expects house prices to rise, differentiating a second Trump presidency from the first.
