Global economy's influence on Malaysia's exports surpasses foreign exchange fluctuations, claims minister.
KUALA LUMPUR: Malaysia's economy is dancing to the tunes of global economic growth and trade, rather than currency swings, according to Trade Minister Tengku Zafrul Aziz. He hinted at a possible slowdown in exports, anticipating a decrease in strength compared to the Q1 of 2025.
During a press conference, Tengku Zafrul highlighted that Malaysia's exports witnessed a substantial rise in the initial quarter of 2025, primarily due to companies rushing to secure orders ahead of US tariffs, as announced by President Donald Trump in early April.
The minister underscored that the growth of the worldwide economy and global trade would have a more significant impact on exports than any currency fluctuations.
Malaysia's exports recorded an impressive 6.8% growth in March compared to the previous year. The US became the prime destination for Malaysian exports, with shipments reaching a record high of 22.66 billion ringgit ($5.4 billion).
Tengku Zafrul attributed this "dramatic increase" in exports mainly to purchases of electrical and electronic products by US buyers,who were stockpiling due to the potential rise in tariffs. However, he cautioned that the strong growth may not persist in the coming months.
Malaysia's export forecast for 2025 stands at a 5.2% rise, with a slight drop from the 5.7% expansion experienced in 2024.
Malaysia is bracing for a 24% tariff on exports to the US, effective July, unless a deal is reached. The Southeast Asian nation has shown readiness to negotiate on non-tariff barriers, reducing its bilateral trade surplus, and exploring a bilateral trade agreement with the US.
Prime Minister Anwar Ibrahim declared on Monday that there's a possibility of negotiating a reduction in the threatened US tariffs, following an agreement by Washington for further discussions.
Tengku Zafrul indicated that Malaysia seeks a zero-tariff deal, and the US is rumored to insist on Malaysia addressing trade imbalances, non-tariff barriers, and safeguarding US technology from transshipment smuggling.
Starting from now, Malaysia's trade ministry will assume the role of sole certificate issuer for US exports, to stamp out illicit transshipment via Malaysia. Illicit shipments' origin countries have not been identified.
The ministry also plans to enhance audits of exporters' applications and bolster investigations to curb transshipment offenses to the US.
[1] Malaysian Investment, Trade, and Industry Ministry, "Malaysia-U.S. Trade Negotiations," [Official Website] (Accessed May 15, 2025).[2] Reuters, "Malaysia secures agreement for further U.S. trade talks," (April 24, 2025).[3] The Straits Times, "Malaysia starts formal negotiations with U.S. to resolve trade dispute," (May 6, 2025).[4] Bernama, "Cabinet approves formal negotiations with US on trade dispute," (May 6, 2025).[5] International Monetary Fund, "Malaysia: Staff Concluding Statement of the 2025 Article IV Mission," (April 23, 2025).
- Malaysia's Trade Minister Tengku Zafrul Aziz predicted a possible slowdown in Malaysia's exports, particularly for the Q1 of 2025, due to global trade fluctuations rather than currency swings.
- In contrast to the Q1 of 2025, Malaysia's exports showed an impressive 6.8% growth in March, with the US becoming the prime destination for Malaysian exports.
- The US-Malaysia trade negotiations are underway to address the potential 24% tariff on Malaysian exports starting July, along with other trade imbalances and barriers.
- Singapore-based news outlet Reuters reported that Washington has agreed for further discussions regarding the threatened US tariffs on Malaysian exports.
- According to Malaysia's Investment, Trade, and Industry Ministry, the Malaysian government plans to assume the role of sole certificate issuer for US exports, aiming to stamp out illicit transshipment via Malaysia.
- In response to the general-news headlines of the US-Malaysia trade tension, Malaysian Prime Minister Anwar Ibrahim indicated a possibility of negotiating a reduction in the threatened US tariffs.
