What Is Next for Malaysia in Tariff Talks?

AWANI

Awani International speaks to Sharmila Suntherasegarun of IDEAS to unpack the key issues discussed during the May 5 special Dewan Rakyat sitting on Malaysia’s tariff strategies and trade positioning.

Transcript

00:00Sekarang kita ingin mengenai semua isu yang menyebabkan dalam duduk di Dewan Rakyat.

00:05Dan bersama kita hari ini adalah Syarmila Suntera Segeran,

00:09pengurus penyelidikan penyelidikan dan perniagaan idea ekonomi dan perniagaan.

00:13Terima kasih banyak Syarmila untuk berada bersama kami.

00:15Apa yang anda menyebabkan dalam duduk yang menyebabkan dalam duduk yang menyebabkan?

00:20Ya, saya rasa pertama saya ingin menyebabkan bahawa duduk yang menyebabkan duduk yang menyebabkan

00:24dan mempunyai hubungan ini di parlimen,

00:26it does show that the government is serious about managing the impact of these tariffs.

00:31And I don't think the emphasis is so much on the shorter measures,

00:35but more on laying out Malaysia's broader position

00:38and to reinforce for investors and also the public confidence.

00:42There was also a clear signal that Malaysia is not planning to escalate or retaliate.

00:47I think instead it's focusing more on protecting export competitiveness

00:51and also sending the right message to investors.

00:53I think that's a good sign given all the uncertainties that are going on globally.

00:58Ya, so the Prime Minister has also announced during this sitting

01:01a RM1 billion financial guarantee and RM500 million in soft loans

01:06just to support the SMEs.

01:08Now, in your view, will this be enough to offset the impact of the,

01:11you know, 24% US tariff, especially for export-reliance sectors?

01:15Yeah, I think the RM1.5 billion SME support package is important,

01:21especially since smaller firms are the ones that are going to be most exposed

01:24to rising input costs and also tariff-related uncertainty,

01:29especially since they are operating on relatively thin profit margins.

01:33But I think the more important point would be how this is dispersed

01:37and how targeting is happening to the right segments,

01:40particularly the export-facing SMEs.

01:42I think that would really determine the impact rather than just the amount itself.

01:46I see.

01:46So, there is this suggestion by Bagan MP Lim Guan Eng

01:51who has called for a freeze on all cost-increasing policies.

01:55Then, this includes tax hikes and the flotation of RM95.

01:58You know, it's a very controversial topic.

02:01How viable is this suggestion in balancing fiscal responsibility

02:05with industrial competitiveness?

02:07Yeah, I think on freezing cost-increasing policies,

02:12I think the concern there is understandable,

02:14especially as I mentioned, you know, smaller businesses operating on tight margins.

02:19I think these sudden increases in fuel and also utility prices

02:23can really hurt operational stability.

02:26But that's it.

02:26I think these structural reforms like the fuel subsidy rationalisation

02:30are something that is necessary to create long-term fiscal space.

02:35Again, I think the rollout is what matters.

02:37If it's not done carefully, I think these reforms could be destructive.

02:41So, I think rather than freezing policies altogether,

02:44I think what is needed is a more transparent and phased approach

02:48with clear communication.

02:49I think businesses should be given the visibility on the timing,

02:54also the mechanism, so that they can plan accordingly

02:56and it's not blindsided,

02:58especially, you know, with all the uncertainties that are going on globally.

03:01So, I think transparency will be the way to reduce market anxiety

03:04rather than removing these policies altogether.

03:08Thank you so much, Sharmila, for your insights.

03:11That was Sharmila Suntera Segeran.

03:13She's the Assistant Manager of Research for the Economics and Business Unit for Ideas.

03:18for the Economics and Business Unit for Ideas.

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