PETALING JAYA (ANN/THE STAR) – As Donald Trump prepares to re-enter the White House in a week, experts are urging Malaysia and ASEAN to prioritise stability amid escalating US-China trade tensions.
ASEAN unity and neutrality
Prof Dr. Wong Chin Yoong from UTAR’s Business and Finance Faculty emphasised the importance of Malaysia maintaining a neutral stance while adhering to trade regulations to protect its economy.
“As the ASEAN chair in 2025, Malaysia must play a pivotal role in ensuring regional unity. Acting collectively as a bloc enhances our leverage when dealing with global powers like the US and China,” he said.
Wong noted that ASEAN’s pragmatic relationship with the US, built on mutual economic interests rather than shared democratic values, is an asset.
“This approach allows ASEAN to focus on trade and economic growth rather than political ideologies,” he explained.
Malaysia’s strategic location, robust infrastructure, skilled workforce, and supply chain capabilities make it an attractive destination for investors from both the US and China.
Challenges of trade practices
Prof Wong acknowledged that businesses relocating production to Malaysia to avoid tariffs often bring benefits like job creation and technology transfer. However, he cautioned against unethical practices such as “origin washing,” where products are relabelled to bypass trade restrictions.
“At least 20 per ent of a product’s value must be added in Malaysia for it to qualify as a Malaysian export,” Wong said, warning that such practices violate trade rules.
While Malaysia is unlikely to become a direct target of US tariffs, Wong noted that broader tariff measures could still impact the country.
Opportunities and risks
Sunway University’s Prof Yeah Kim Leng highlighted opportunities for Malaysia in regional trade agreements such as the China-ASEAN Free Trade Agreement and the Regional Comprehensive Economic Partnership.
However, he pointed out potential challenges for Malaysian firms, particularly those collaborating with Chinese partners in the solar sector, due to heightened US tariffs.
“ASEAN products may still remain competitive due to lower costs, but firms must diversify their markets to mitigate risks,” he said.
Malaysia’s significant role in the semiconductor industry—accounting for 13% of global testing and packaging—positions it to capture business from Chinese firms diversifying their assembly needs.
Navigating Trump’s policies
Assistant Professor Lee Pei May from the International Islamic University Malaysia warned that Trump’s proposed universal tariffs on all imports could affect Malaysian exporters, regardless of their ties to China.
“Malaysia’s neutral stance has attracted investments, but the government must carefully monitor these to avoid being exploited. Maintaining diplomatic engagement with both the US and China is crucial,” she said.
With Trump’s potential policy shifts and intensifying trade dynamics, experts underscore the importance of ASEAN unity and strategic diplomacy to safeguard Malaysia’s economic interests.
