ANWAR GIVES ASSURANCE MALAYSIA WILL NOT SLIP INTO RECESSION FOLLOWING US TARIFFS

KUALA LUMPUR, APRIL 6 (Bernama) -- Prime Minister Datuk Seri Anwar Ibrahim has given an assurance that Malaysia will not slip into a recession for now following the imposition of tariffs by the United States, as the country's economy remains resilient.

Anwar reiterated that Malaysia will not introduce retaliatory tariffs.

"If the 24 per cent tariff were implemented, from an economic perspective, the 2025 Gross Domestic Product (GDP) growth projection of 4.5 - 5.5 per cent will need to be reviewed.'’

"However, for now, let me reassure you that the government does not foresee a recession in Malaysia,” he said in a video addressing the US tariffs.

Anwar, who is also Finance Minister, said the country's "macroeconomic foundations remain strong.

He said Malaysia's positive macroeconomic fundamentals were well supported by its robust household spending, strong domestic investment, healthy tourism receipts and the continued implementation of national masterplans.

"Our sound economic fundamentals, therefore, will enable us to weather this challenge from a position of strength and preparedness, the Prime Minister said, allaying concerns over President Donald Trump's tariffs imposed on 168 countries which has riled  markets and started a global trade war after China retaliated.

Malaysia is among those affected by the tariffs whereby from April 5, every Malaysian product shipped to the US will face at least a 10 per cent duty; and from April 9, most products will face a 24 per cent rate, with some exemptions.

As an open trading nation, Malaysia deems the unilateral decision on reciprocal tariffs as a major threat to the current global trade and investment system, said Anwar.

Anwar said that MADANI government firmly views the tariff imposed on every country that trades with the US constituted a rejection of the principles of free, non-discriminatory, predictable and open trade under the Geneve-based World Trade Organisation (WTO).

"This very organisation was established by, among others, the US itself in 1948 through the General Agreement on Tariffs & Trade (GATT),” he said.

Challenging mid-to-long-term impact

As one of America's largest trading partners in this region and as a major destination of US-based foreign direct investment, the mid-to-long-term impact will be challenging.

"These tariffs have also impacted almost every other trade and investment partner of Malaysia and will likely hit global economic growth," said Anwar.

Anwar said that "while some exemptions partially shield semiconductors, which is Malaysia’s largest export category to the US, nevertheless, these new tariffs will still adversely impact many of our Malaysian industries including textiles, furniture, rubber and plastics."

The Prime Minister said the government understands the concerns, anxieties and difficulties faced by the workers, manufacturers and businesses in these sectors."

"We affirm our determination to overcome and adapt to this challenge."

"Make no mistake, we are taking these tariffs seriously because it challenges the fundamental principle of nondiscrimination underpinning global trade rules."

"Further, it strikes at the heart of Malaysia’s identity as a proud non-aligned trading nation, affecting the livelihoods and economic security of countless Malaysians who depend upon open and fair access to international markets,” he said.

47 per cent tariff calculation on Malaysia flawed

Malaysia refutes the claim by the US authorities that it has imposed a 47 per cent tariff on US imports into the country.

Anwar pointed out that the basis for calculating this tariff is fundamentally flawed, which has inaccurately resulted in Malaysia being imposed a reciprocal tariff of 24 per cent.

"Yet, our response will be calm, firm and guided by Malaysia’s strategic interests, our goal is clear.

"We are fully committed to securing a favourable resolution that preserves vital market access, attracts continued foreign investment, and supports the well-being of Malaysian workers and businesses."

In the spirit of maintaining positive and progressive relations with all trading partners, Anwar said the MADANI government will engage constructively with the US to safeguard vital market access, preserve investor confidence and secure fair outcomes for the country's exporters.

"In short, we must find a mutually acceptable, fair and equitable solution to this problem,” he said, adding that "some of these efforts are already underway.”

"Our trade and foreign ministries are analysing the  impact of the tariffs in detail, running simulations, consulting stakeholders across industries and communicating directly with US government counterparts as well as American firms which have long operated in Malaysia."

"Our trade is built upon a diversified network of regional and global partnerships consolidated over many years – including through ASEAN, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and ongoing negotiations with the European Union and deepening ties across the Global South,” he said.

"The government has taken several initial steps to address the impact of tariffs, including the establishment of the National Geo-economic Command Centre (NGCC), which I chair," he said.
-- BERNAMA