The investment, trade and industry ministry and the Malaysia External Trade Development Corporation should introduce targeted measures to support local exporters affected by the additional 10% US tariff, says the Small and Medium Enterprises Association of Malaysia (Samenta).
Samenta president William Ng said these measures should include establishing dedicated export diversification matching grants, either through the existing market development grant or other supplementary schemes.
Ng said this would help SMEs leverage Malaysia’s regional trade agreements to expand into high-growth markets across East Asia, Australasia and the Middle East.
He said the grants would help cover market entry and regulatory certification costs in alternative regional markets.
“We will also need financial assistance in the form of audit co-funding to assist SMEs in maintaining rigorous labour compliance documentation,” he said in a statement.
Earlier today, the US said it would impose an additional 10% tariff on nearly all Malaysian exports, citing the nation’s failure to impose and effectively enforce a ban on imports linked to forced labour.
Malaysia is among 60 trading partners in the latest escalation in the trade war reignited by US president Donald Trump when he returned to office last year.
The tariffs, which replace an identical levy which expires on Friday, are based on claims the key economic partners have failed to properly tackle forced labour.
Ng said the tariff would force SMEs to either absorb the additional duty, jeopardising their cash flow, or raise export prices at the risk of losing US buyers to competing markets.
“Downstream manufacturing sectors, precision engineering suppliers, furniture and wood processors, and light electronics makers are particularly vulnerable to these price pressures,” he said.
