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Malaysia
This Week in AsiaEconomics

Malaysia’s electronics sector at risk as experts call out Trump’s ‘voodoo’ tariffs

Analysts say Washington’s semiconductor exemption offers little relief as Malaysia’s broader electronics industry face steep import levies

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A worker inspects semiconductor chips at the chip packaging firm Unisem (M) Berhad plant in Ipoh, Malaysia. Photo: Reuters
Joseph Sipalan
Malaysia’s vital electrical and electronics sector faces a looming blow from the latest round of US tariffs, which analysts warn will impose steep costs on finished consumer goods and severely disrupt smaller firms deeply embedded in global supply chains.
US President Donald Trump’s announcement of broad tariffs against nearly all US trading partners on Wednesday – including a 24 per cent levy on goods from Malaysia – has roiled global markets, with analysts warning of a potential trade war if countries respond with retaliatory measures that could accelerate inflation.

Washington’s new tariffs include limited exemptions for semiconductors – a crucial Malaysian export – but industry players fear those exemptions will not cover finished electrical and electronic goods, which, along with chips, accounted for 120.2 billion ringgit (US$26.7 billion) worth of US-bound exports in 2024.

“Unless you ship pure semiconductors back to the US, chips that go into products like phones, for example, will fall under the 24 per cent [tariff],” said Wong Siew Hai, president of the Malaysian Semiconductor Industry Association (MSIA), referring to the tariff rate set for Malaysia.

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“It all ends up being captured by a fishnet under the total value [of shipments], and 24 per cent is very significant.”

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