Malaysia’s semiconductor companies remain cautious about future US trade actions, despite current exemptions from tariffs. Datuk Wong Siew Hai warns of possible indirect impacts as semiconductors are integral to various products. The industry plans to monitor developments as negotiations with the US commence.
Malaysia’s semiconductor firms are facing uncertain prospects following recent trade developments. Although the industry was exempted from the broad tariffs imposed by the United States, concerns remain about potential future actions targeting semiconductors. President of the Malaysia Semiconductor Industry Association, Datuk Wong Siew Hai, emphasized that American companies operating in Malaysia must also be vigilant regarding possible tariffs.
In an executive order, President Trump announced a 24% tariff on goods imported from Malaysia, effective April 9. This sweeping trade policy encompasses all trading partners, although semiconductors were exempted from this particular reciprocal tariff measure. Electrical and electronic products, including semiconductors, contribute significantly to Malaysia’s exports, constituting roughly 40% of the total. Major global semiconductor firms, such as Intel and Infineon Technologies, have large operations in Malaysia.
Despite their current exemption, Wong pointed out that semiconductors could still be adversely impacted. He explained that these components are often integrated into products such as computers and industrial equipment, which may be subjected to tariffs. “If the product is shipped to the US, it will be captured under the equipment tariff,” Wong noted, indicating that the exemption may not be absolute.
Given the volatility and unpredictability of the Trump administration’s policies, the semiconductor industry is adopting a cautious approach. Wong stated that the sector will “wait and see” concerning future developments. Currently, the tariffs are not definitive; negotiations are ongoing, as the Ministry of Investment, Trade & Industry confirmed that Malaysia intends to engage with the US regarding these tariffs.
In summary, Malaysia’s semiconductor industry remains wary of potential future tariffs despite current exemptions. The significant role of semiconductors in the electrical and electronic sector, along with their integration into various products, raises concerns about indirect impacts from US trade policies. The industry is preparing for negotiations while navigating through uncertainty, reflecting on the necessity of vigilance in a fluctuating political landscape.
Original Source: theedgemalaysia.com
