FMM In The News: MALAYSIAKINI, April 10, 2025
The government should take decisive steps during the United States’ 90-day reciprocal tariff pause window to protect Malaysia’s industrial base and long-term competitiveness, said the Federation of Malaysian Manufacturers (FMM).
Its president Soh Thian Lai said the association recommends the government pursue targeted, sector-specific relief, particularly for rubber products, industrial machinery, non-semiconductor electrical and electronic components, furniture, paint, medical devices, garments, and the electronics manufacturing services sectors.
“These industries are vital to both Malaysia’s manufacturing ecosystem and the US supply chain resilience.
“We also encourage the government to highlight Malaysia’s open trade stance, including its low average most-favoured nation tariff and limited use of non-tariff barriers, to support a reassessment of Malaysia’s tariff classification under the US framework,” he said in a statement today.
Soh reiterated FMM’s call for urgent government support to bolster the manufacturing sector by reviewing and putting policies that are raising operating costs on hold this year.
In a formal letter to the Finance Ministry dated April 8, 2025, FMM requested a deferment of the expansion of the sales and service tax (SST) scope, scheduled to take effect on May 1, 2025.
“When combined with the upcoming electricity base tariff adjustment in July 2025, these measures will significantly increase business costs and prices of essential goods.
“We have urged the government to conduct a comprehensive impact assessment on the implications of the SST expansion, particularly its effects on inflation, business sustainability, and consumer affordability,” he added.
Set up National Supply Chain Council
Soh also noted FMM’s call for the immediate establishment of a National Supply Chain Council to coordinate cross-ministerial and public-private action on trade resilience, logistics continuity, and industrial security.
He said this council would help identify vulnerabilities and align certification, infrastructure, and workforce strategies to support manufacturers during disruptions better.
At the regional level, Soh said the association urges the government to use Malaysia’s Asean chairmanship in 2025 to propose the creation of an Asean Supply Chain Coordination Council, which would enhance regional cooperation on trade facilitation, digitalisation, and sourcing in line with the Asean Framework on Supply Chain Efficiency and Resilience.
Soh highlighted that the calls for vigilance and proactive safeguards to address the risk of Malaysia becoming a destination for redirected exports from markets are still subject to steep US tariffs, particularly from economies facing significantly higher rates.
“This trade diversion could lead to an influx of imported goods, intensifying competition, suppressing prices, and undermining the viability of local manufacturers,” Soh said.
To mitigate this, Soh said the government should enhance customs surveillance and enforcement mechanisms to detect and prevent fraudulent declarations of origin and transhipment abuses.
“In parallel, we urge close monitoring of import trends and proactive engagement with affected industries to ensure the domestic market remains competitive and protected from unfair trade practices,” he added.
Soh said the 90-day pause gives Malaysian manufacturers time to reassess strategies and engage with stakeholders, but the deferral of the 24 percent tariff, originally set for April 9, 2025, should not be seen as a resolution.
“While the 90-day pause offers short-term relief and some tactical space for businesses to undertake contract renegotiations, pricing recalibrations, supplier diversification, and review of shipping routes, the absence of clarity on the final outcome continues to weigh heavily on business confidence, particularly for sectors with significant exposure to the US market,” he added.
- Bernama