As global power shifts reshape trade flows, Malaysia faces a new era of tariffs, regulations and shifting standards — and must adapt quickly to protect its economy and create new opportunities.
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00:00Tariffs, export restrictions and investment barriers have now become the sharpened instruments of geopolitical rivalry.
00:11This is no passing storm. It is the new weather of our time.
00:17That was Prime Minister Anwar Ibrahim's opening speech at the ASEAN Foreign Minister's meeting in Falalumpur this July.
00:24He warned that tools like tariffs and bans are increasingly weaponized against weaker countries.
00:29Why this warning now? Because protectionism, when countries put up barriers to shield their own industries, is back in the headlines.
00:38And for a small open economy like Malaysia, the ripple effects are impossible to ignore.
00:44Take the US-China trade war. Washington slapped sweeping tariffs on Chinese goods and tightened non-tariff rules.
00:51The goal? To protect American jobs and counter Beijing's influence.
00:55But the fallout didn't stay in Washington or Beijing.
00:58Estimates show US consumers themselves paid an extra 70 billion US dollars in a single year.
01:04And the ripple effects reach countries like Malaysia, disrupting supply chains and raising costs for producers and consumers alike.
01:11Usually, smaller economies have a referee, the World Trade Organization.
01:16Since 1995, it's acted as the arbiter of global trade, offering rules and a neutral process to resolve disputes.
01:25But that system is now in crisis.
01:28As a failure to reach consensus on appointing new members has left the appellate body without enough forum to hear cases.
01:35With too few judges left, the court can't hear appeals.
01:38That means countries can now appeal into the void, sending disputes to a non-functioning court which stalls rulings indefinitely.
01:46For smaller economies like Malaysia, this is dangerous.
01:50Big powers can fall back on political influence or retaliation.
01:54Malaysia can't. It relies on rules.
01:58So what is Malaysia doing to avoid becoming a victim of this protectionist wave?
02:02First, it's drawing red lines in trade talks.
02:06In July, Investment Trade and Industry Minister Tempu Zafrul Aziz stressed Malaysia would not compromise on halal standards, government procurement,
02:15and the right to impose a digital tax on a non-discriminatory basis.
02:19Second, it's pushing for stronger regional cooperation.
02:23And as we navigate external pressures, we need to fortify our internal foundations.
02:30Trade among ourselves.
02:32Invest more in one another.
02:34And advance integration across sectors with resolve.
02:39Third, it's diversifying and expanding ties with emerging markets and BRICS nations to spread risk and boost resilience.
02:47Back at home, Malaysia is investing in high-value sectors like digital services and renewable energy, upgrading infrastructure such as an AI-driven port in Port Dixon, and cutting interest rates to support demand.
02:59Part of Malaysia's strategy is strengthening small and medium-sized enterprises.
03:04Laura Lachia, president of the Malaysia Association of Sustainable Supply Chain and Innovation, says the instinct to pull back in tough times can actually hold businesses back.
03:14When things get tough, it's instinctive that you try to shrink your area of influence or at least the areas that you operate in.
03:25So, if you just say, okay, times are difficult, let's expand.
03:30That's counter-intuitive.
03:32I think SMEs need to consciously make that decision that they want to go beyond that and just start. Start small, but start, you know?
03:43There's also a call to rethink Malaysia's reliance on foreign investors.
03:47Sufjan Juso, a trade expert at University Kebangsaan Malaysia, argues that foreign capital can only go so far.
03:54The biggest misconception is that FDI is the magic wand.
03:59That it can solve everything. No, it doesn't.
04:02You need FDI as a catalyst. You have to move also your domestic investment.
04:09In short, Malaysia knows it cannot control the winds of global protectionism, but it can set its sails.
04:16By defending its red lines, deepening regional ties, and investing in resilience, Malaysia is working not just to survive the storm, but to emerge stronger in its aftermath.
04:26The multilateral system cannot endure if its principles are upheld only when convenient.
04:34ASEAN must be among those who choose to stand for rules, even when others choose to retreat.
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