Malaysia stands to benefit significantly from Donald Trump's return as US President, particularly in attracting foreign direct investment (FDI) and boosting export opportunities.
According to an analysis by the KSI Strategic Institute for Asia Pacific and the Economic Club of Kuala Lumpur (ECKL), Trump's plan to implement a 10% tariff on Chinese goods starting 1st February could prompt companies to relocate their production lines to other countries, with Malaysia emerging as a favourable option.
“For Malaysia, a key exporter of electronic products and components to the United States, such measures could impact export competitiveness. However, as companies seek to diversify supply chains away from China, Malaysia’s semiconductor industry, which holds about 13% of the global market in chip packaging and testing, may attract increased investment,” they commented.
The statement highlights that escalating US-China trade tensions under Trump’s policies are likely to accelerate the “China Plus One” strategy, where companies seek to diversify their manufacturing operations beyond China, The Star reports.
“Malaysia stands to benefit from this shift, potentially seeing an increase in FDI, particularly in the electronics, machinery and palm oil sectors.
“This influx could contribute an additional RM19.7bil to Malaysia’s gross domestic product over four years, equivalent to a 1% increase,” the analysis reads.
Furthermore, the statement also emphasised the potential effects of Trump’s energy policies, noting that his support for traditional energy sectors, such as fossil fuels, could result in higher US production and exports.
“For Malaysia, a net oil exporter, this could result in lower global energy prices, affecting revenue from mineral fuel exports,” it warned.
In addition, the statement noted that Malaysian petroleum companies might discover new opportunities if the United States scales back renewable energy incentives, potentially driving higher demand for traditional energy sources.
KSI and ECKL also cautioned that Trump’s return to the presidency could present challenges, necessitating vigilant and proactive policy measures to ensure economic stability.
The statement highlighted Malaysia's domestic strengths, including its diversified economy, strategic global location, well-developed infrastructure, skilled workforce, and resilient financial systems.