Tariffs - The Accidental State Enemy 

By M. Saraswathi

KUALA LUMPUR, April 12 (Bernama) -- By now, just about every adult and even many younger individuals has likely come across the word tariffs, whether through the news, social media, or everyday conversations since April 2.

Even the penguins on the remote Heard and McDonald Islands were not left out from the wave of reciprocal tariffs announced by United States (US) President Donald Trump.

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Although, these measures have been paused for most countries, with the exception of China, the damage has already been done.

Over the cause of the week, the announcement roiled the global stock markets, wiping out trillions of dollars in value. Economists and analysts began downgrading growth forecasts and even warned that a recession is at our door step.

Apple reportedly scrambled five emergency flights to ship iPhones from India and China into the US in a last-minute effort to beat the impending tariffs — a dramatic move that displays the kind of high-stakes, high-cost manoeuvring corporations are forced into when international trade policies shift overnight. 

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This isn’t just an inconvenience, it’s turbulence on a global scale.

Malaysia was imposed with a 24 per cent reciprocal tariff. Although it has been paused, the flat 10 per cent baseline tariff still applies to all countries. Malaysia’s average applied tariff rate to the US is 5.6 per cent.

The method of calculation used by the Trump administration seems dubious, with multiple reports labelling it as a "tariff formula that doesn’t make economic sense, based on error and faulty” from the outset.

 That said, tariffs aren’t a bad tool, if used correctly. 

At their core, tariffs are simply taxes imposed by a government on goods imported from other countries. They serve two primary purposes: first, as a source of revenue for the government; second, as a tool to protect domestic industries and businesses. 

This protective function is important for mainly Micro, Small, and Medium Enterprises (MSMEs), which may struggle to compete with low-valued or heavily subsidised  foreign products. 

By making imported goods more expensive, tariffs are intended to level the playing field — encouraging consumers to buy local and supporting the growth of domestic enterprises. They offer consumers a choice between domestically produced goods and imported alternatives.

However, what US President Donald Trump did in the name of “making America great again” is nothing short of a bully, which Prime Minister Datuk Seri Anwar Ibrahim aptly described as “megaphone diplomacy.”

Malaysia is not reacting, but that doesn’t mean we are not responding. 

The Ministry of Investment, Trade and Industry (MITI) was well-prepared for the reciprocal tariffs announcement, and when it came, its Minister Tengku Datuk Seri Zafrul Aziz hit the ground running.

The cool-headed technocrat-turned-politician had a well-crafted communication strategy in place.

He broke down the crisis in plain, relatable lingo on social media, while simultaneously engaging business leaders, coordinating with authorities, and fielding tough questions from journalists with composure.

As an open trading nation, Malaysia may not emerge from this crisis unscathed — but with prudent, steady-handed leadership, the country can weather the storm and minimise the damage.

-- BERNAMA