PETALING JAYA: Use the 90-day pause on United States tariffs to prepare contingency plans to assist Malaysian businesses adapt to the 24% planned tariff, says the Federation of Malaysian Manufacturers (FMM).

Its president Tan Sri Soh Thian Lai said the 90-day reprieve, which was announced by US President Donald Trump on Wednesday (April 9), offered only short-term relief for the world and that the government had to immediately start preparing local businesses for the coming storm.

“It is a crucial window for local businesses to begin contract renegotiations, pricing recalibrations, supplier diversification, and review of shipping routes.

“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,” he said in a statement on Thursday (April 10).

He recommended that the government try to negotiate or implement sector-specific relief for the most vital or affected industries.

Soh said this includes the industries of rubber products; industrial machinery; non-semiconductor electrical and electronic components; furniture; paint; medical devices; garments; and the electronics manufacturing services (EMS) sector.

“We encourage the government to highlight Malaysia’s open trade stance, including its low average Most Favoured Nation (MFN) tariff and limited use of non-tariff barriers, to support a reassessment of Malaysia’s tariff classification under the US framework during negotiations,” he said.

Soh also called on the government to defer and reassess any of its planned local tax and tariff policies later this year that would increase operating costs for local businesses which in turn would increase essential goods prices.

He proposed that the government establish both a national and Asean supply chain council to help coordinate local cross-ministerial and public-private actions towards trade resilience, logistics continuity, and industrial security.

“The local council would help identify vulnerabilities and align certification, infrastructure, and workforce strategies to better support manufacturers during disruptions which may be caused by the tariffs.

“While at the regional level, the Asean council can serve as a platform to institutionalise regional cooperation on trade facilitation, digitalisation, and regional sourcing, thereby preserving Asean’s role as a trusted and agile global production hub,” he said.

Soh also urged the government to take proactive measures to protect the country from becoming a possible hub for redirected exports from foreign countries that are facing higher US tariff rates.

“If not addressed, this trade diversion could lead to an influx of imported goods, intensifying competition and suppressing prices which undermine the viability of local manufacturers.

“To prevent this, Customs Department’s surveillance and enforcement mechanisms must be enhanced to better detect and prevent fraudulent declarations of origin and transshipment abuses.

“Trade remedy provisions such as anti-dumping and safeguard measures, should be ready to activate where and when warranted,” he said.  

He added that the government must also conduct close monitoring of possible import trends and hold proactive engagement with possibly affected industries to ensure the domestic markets remain competitive and protected from unfair trade practices.