BUTTERWORTH – Prime Minister Datuk Seri Anwar Ibrahim has highlighted the significant threat posed by the US’ 24% reciprocal tariffs on Malaysia’s exports, which could touch on semiconductors valued at RM200 billion.
He noted that the valuable components account for 65% of the nation’s electrical and electronic (E&E) exports.
Penang, a major contributor to Malaysia’s export economy, is particularly concerned, as the state is home to many companies involved in semiconductor production.
Speaking at a Raya Aidilfitri open house event at the PICCA Convention Centre @ Butterworth Arena, Anwar urged Penang and Malaysia to unite in addressing the challenge.
“I have advised Chief Minister (Chow Kon Yeow) that when faced with a crisis, we can choose to ‘megeluh’ (sulk) or we can pool our efforts to find new solutions,” Anwar said.
“We need to utilise Malaysia’s strengths, such as its good ties with the US, Europe, China, and its neighbours in Asean.”
Anwar added that Asean countries had agreed to work together in seeking solutions, stressing that Malaysia would not face the challenge alone, but as part of a collective regional effort.
“We are not only moving as Malaysia, but as one (collective) strength,” he said.
The Prime Minister also emphasised the need for Malaysia to lead by example as Asean chair, fostering national peace, economic stability, and addressing systemic flaws.
“Bad practices such as laziness, delays in approval (processes), (poor) management, and corruption must be stopped. We also need to be brave. If we do all these things, I believe that we can bring significant changes (for the country),” Anwar said.
In his speech, Chow shared that Penang had initiated two key strategies to safeguard its economy: the formation of a tariff taskforce and a trade toolkit.
The Penang Tariff Monitoring Taskforce will act as a centralised platform to monitor trade developments, engage with impacted industries, and assist in policy formulation.
Additionally, Penang will collaborate with the federal government to create a Trade Adaptation Toolkit aimed at helping exporters and SMEs navigate the increasingly complex landscape of tariffs and compliance requirements.
For the record, the US reciprocal tariff will not apply to copper, lumber, semiconductors, and pharmaceutical products.
A forthcoming annex will also detail other exempted items, including certain critical minerals and energy products.
Anwar also welcomed the recent 90-day tariff pause announced by the Trump administration, providing temporary relief for Malaysia and 74 other countries.
He noted that this would give the government time to work on a resolution with the US, particularly through Asean cooperation.
In 2023, Penang-based companies exported RM76 billion worth of goods to the US, accounting for 17% of Malaysia’s total exports, with electrical and electronics forming the bulk of these exports. – April 12, 2025