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Malaysia Dodges The Worst Of Trump’s Trade Smackdown: Here’s Why

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United States President Donald J. Trump just dropped a trade bomb that’s sending shockwaves through global markets.

It feels like a sequel nobody asked for but everyone saw coming.

But Malaysia might have accidentally wound up in the better seats of this economic theatre.

Let’s break it down: Starting on 5 April, the 47th president of the United States will slap a 10% tariff on everything coming into America before hitting specific countries with custom-tailored pain points on 9 April.

ASEAN’s Trade Tariff Olympics: Malaysia Takes Middle Ground While Vietnam Gets Gold in Pain

Malaysia will be tagged with a 24% rate, which sounds rough until you consider what some of our neighbours are dealing with.

Vietnam? They’re staring down a crushing 46% tariff.

Thailand’s got 36%. Indonesia’s looking at 32%.

Meanwhile, we’re hanging out in the same tariff bracket as Japan (also 24%), which is kind of like accidentally getting upgraded to business class on a budget ticket.

Sure, 24% isn’t exactly champagne and roses—it’s going to sting, but in the grand ASEAN Suffering Olympics, we’re nowhere near the podium.

Singapore’s the only regional player who made out better, skating by with just 10%.

Malaysia’s Tech Exemptions and Trump’s Trade ‘Behavior Bonus’

What’s particularly interesting for Malaysian businesses is the disparity in existing tariffs mentioned in Trump’s announcement.

For example, while the U.S. currently charges just 2.7% on rice imports, Malaysia has been charging 40%—exactly the kind of imbalance Trump targets.

Some of Malaysia’s tech sector might dodge this bullet entirely as the fine print reveals that semiconductors (hello, Penang!) and certain critical minerals get a get-out-of-tariff-free card.

That’s not nothing in a world where chips are worth their weight in gold.

There’s also a “good behaviour” clause in Trump’s decree: if we play nice with U.S. interests, that 24% could shrink.

If we start a trade war, it could balloon. It’s economic carrot-and-stick, Trump style.

The bottom line? In Trump’s economic WrestleMania, some countries are getting the championship beatdown, while Malaysia’s scripted for a more survivable spot on the card.

Golden Rule, Silver Lining

Malaysia’s monthly trade dynamics with the U.S. tell an interesting story: As of December 2024, Malaysia exported MYR18.9 billion while importing RM12 billion from the United States, maintaining a positive trade balance of RM6.89 billion in Malaysia’s favour.

This might help explain why Malaysia didn’t get hit with the heaviest tariffs.

From the fact sheet, we can see that the U.S. maintains one of the world’s lowest average tariff rates at 3.3%, while many Asian economies have significantly higher rates.

This disparity is precisely what Trump’s “Golden Rule” trade policy aims to address – though Malaysia’s relatively moderate 24% hit suggests we’re not considered among the worst offenders in this new economic showdown.

The real question now is: Will Malaysian businesses roll with these punches, or will they start looking for other markets to court?

5 April is coming up fast, and after that, it’s a whole new ballgame.

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Malaysia Dodges The Worst Of Trump’s Trade Smackdown: Here’s Why
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