FMM In The News: BUSINESS TIMES, April 10, 2025
KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) has called for the government to take decisive steps during the 90-day delay of the reciprocal tariffs to protect Malaysia's industrial base and long term competitiveness.
Its president Tan Sri Soh Thian Lai said that although the tariff pause offers short-term relief, the absence of clarity on the final outcome continues to weigh heavily on business confidence.
"As a result, FMM members are not treating this pause as a reprieve from action, but rather as a critical window to accelerate, not delay, contingency planning," he said in a statement.
FMM welcomed the government's move to undertake a mission to the United States to engage with key counterparts on this issue.
It recommended four measures that the government can adopt to overcome the reciprocal tariffs.
To support the government's engagement with US counterparts, FMM recommends pursuing 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 sector.
Soh said these industries are vital to both Malaysia's manufacturing ecosystem and US supply chain resilience.
FMM also reiterated its call for urgent government support to bolster the manufacturing sector by reviewing and putting on hold policies that are raising operating costs this year.
It said there is also a need for immediate establishment of a National Supply Chain Council to coordinate cross-ministerial and public-private action on trade resilience, logistics continuity, and industrial security.
"This council would help identify vulnerabilities and align certification, infrastructure, and workforce strategies to better support manufacturers during disruptions. At the regional level, FMM urges the government to leverage Malaysia's ASEAN Chairmanship in 2025 to propose an ASEAN Supply Chain Coordination Council," said Soh.
FMM also called for vigilance and proactive safeguards to address the risk of Malaysia becoming a destination for redirected exports from markets 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 Malaysian manufacturers have expressed widespread unease over both the direct and indirect impacts of the US reciprocal tariffs, with many anticipating export costs to rise by at least 10 to 30 per cent, alongside growing pressure from international buyers to lower prices or renegotiate terms.
"In response, companies are actively adjusting supply chains, exploring alternative markets and engaging with relevant government agencies," he added.
Additionally, Soh said there is rising concern that Malaysia may face an influx of redirected exports from markets experiencing steep tariff escalations, which could undermine the competitiveness of local industries.
"FMM believes that Malaysia's manufacturing sector, if supported by coherent domestic policies and proactive global engagement, will remain a trusted and competitive hub in global value chains.
"The next 90 days must be used strategically not only to address the current threat but also to lay the foundation for long-term resilience."