KUALA LUMPUR: The negative impact of new US tariffs on Malaysian exporters and multinational corporations may be limited in the short term, according to Bank Negara Malaysia (BNM).
Governor Datuk Shaik Abdul Rasheed Abdul Ghaffour said 69% of the 36 export-oriented firms engaged by the central bank reported that they do not expect to be negatively affected over the next three months.
“The tariffs will affect our exports directly through lower demand from the US and indirectly via lower global growth, especially from our major trading partners. We expect the impact will be contained and limited,“ he said at a press conference on Malaysia’s first quarter of 2025 gross domestic product growth today.
He noted that mitigating factors could help cushion the near-term impact, including the front-loading of exports by firms ahead of tariff enforcement.
“We have observed some signs of front-loading in E&E exports as firms try to soften the impact of tariffs. This can cause the strong underlying demand for E&E products. We expect demand for E&E to continue, as supported by Malaysia’s entrenched position in the global value chain and AI-related demand,“ Abdul Rasheed said.
He added that about 30% of Malaysian exports to the US are exempted from tariffs, including key products such as semiconductors. “But there could be further announcements post-negotiation. We do not know, so we need to remain vigilant and take it as it comes.”
The exports tend to be priced inelastic, he said, which means the quantity demanded will not drastically change in the short term when prices increase due to tariffs. “Examples of these products include electrical machinery, computer hardware, and optical and scientific equipment.”
Furthermore, Abdul Rasheed said Malaysia’s export base is highly diversified, with no single country accounting for more than 15% of total exports. “We have a very well diversified export market and products. This is where you will mitigate in terms of the impact on Malaysia.”
BNM noted that 31% of the surveyed firms reported negative impacts, citing factors such as lower final demand, general demand uncertainty, and higher business costs and prices. The survey findings were based on engagements with 36 export-oriented firms conducted between April 20 and May 13.
