KUALA LUMPUR (April 10): Some Malaysian exporters of manufactured goods destined for the United States have temporarily halted shipments as they await clearer information on the financial implications of the newly imposed tariffs, which took effect on Wednesday.

The affected sectors include furniture, textiles, and spare parts for electrical and electronic devices. However, glove manufacturers reported being unaffected, while an official from the semiconductor industry stated that no exporters in their sector have delayed shipments so far.

Furniture exporters reported receiving instructions from a week ago to postpone shipments until the tariff situation becomes clearer.

“The situation on the ground is a bit chaotic. Importers in the US do not know exactly how much they have to pay with the tariffs in place, which is why they have told their suppliers to hold off the shipments.

“Exporters from Malaysia also do not want to send their goods until administrative procedures, especially on the extra charges resulting from the tariffs, are clarified. They don’t want to ship their goods only to see them left at the port without payment,” a furniture exporter explained.

The exporter noted that there are thousands of codes for each product imported by the US, developed over the years, with administrative changes typically handled by the US Department of Trade. “Before the tariff issue, the tax paid by importers was less than 7%. They do not know the new rate. While waiting for clarity, they are using their existing stocks to meet customer demand,” the exporter added.

Manufactured goods are the cornerstone of Malaysia’s exports, accounting for 85% of the total, estimated at RM1.6 trillion in 2025.

According to the Malaysia Economic Outlook Report 2025, the country's exports to the US have been increasing. The average value between 2018 and 2020 was RM98.8 billion, which grew to RM159.9 billion between 2021 and 2023.

The electrical and electronics (E&E) industry is central to Malaysia’s manufacturing sector, with most of its products shipped to the US. Other significant exports to the US include petroleum products, machinery, equipment and parts, optical and scientific equipment, and rubber products.

A petroleum product exporter also reported holding off on shipments while awaiting further instructions from their US customers. They specified that only shipments to the US were affected by the new tariff.

“The customers in the US have stated that they will be using their existing stock until the situation becomes clearer,” the petroleum product exporter said.

About 60% of Malaysia's exports to the US are E&E products, and approximately half of that comprise semiconductors, which are exempt from the latest broad US tariffs, according to the Ministry of Investment, Trade and Industry.

Hence, no semiconductor exporters are currently halting shipments to the US, according to Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai when contacted. But the tariff has raised concerns among industry players, with fears that semiconductors could be targeted in future rounds.

In a survey MSIA conducted after Trump's tariff announcement, 65% of its members believe the tariff will impact their business over the next 12 months and beyond. Additionally, 74% believe it could deter investments in Malaysia and affect the country’s attractiveness as an investment destination, Wong shared.

The survey also indicated that many companies are evaluating Malaysia’s competitiveness and that a better understanding of the issue is needed after Trump makes his final decision following negotiations with other countries. This is because while the tariffs already took effect on Wednesday, many countries and trade blocs, including Asean, are still seeking a reduction in these tariffs due to their potential impact on the manufacturing sector. 

In 2024, E&E exports to the US were RM120 billion, making up about 20% of Malaysia’s overall E&E exports of RM601.18 billion, which was in turn the largest portion of the country's total exports, at 39.9%, according to data from the Malaysia External Trade Development Corporation (Matrade).

Semiconductors accounted for RM56 billion of Malaysia's RM120 billion E&E exports in 2024.

Glove manufacturers — Top Glove Corp Bhd (KL:TOPGLOV), Supermax Corp Bhd (KL:SUPERMX) and Kossan Rubber Industries Bhd (KL:KOSSAN) — are continuing to ship their products to the US as usual. Top Glove, for one, is anticipating increased volumes due to relatively favourable tariff rates.

Top Glove said the 24% tariff faced by Malaysian exporters is comparatively lower than the steep 104% tariff imposed on China, where most of their competitors are located. Malaysia also holds a more advantageous position compared to other rubber glove exporting countries like Vietnam (46% tariff), Thailand (36%) and Indonesia (32%).

“As the US accounts for about 25% of Top Glove’s global export sales, we believe this will generally be positive for the company. However, as these are early developments, we will continue to monitor the situation and assess the full impact of the tariffs in the coming months.

“We are mindful that external factors, such as tariffs, are beyond our control. While we remain vigilant in monitoring such developments, our approach now, as with any external challenge, is to focus on what we can control: maintaining our commitment to producing acceptable quality products efficiently at a low cost, in line with our business direction,” Top Glove said.

Kossan group managing director cum chief executive officer Tan Sri Lim Kuang Sia, on the other hand, suggested that some glove buyers might adopt a wait-and-see approach as glove prices increase due to the latest tariff.

Overall, the tariffs' impact is still unfolding, and rubber glove manufacturers are monitoring the effects, according to the Malaysian Rubber Glove Manufacturers Association (Margma). “While this situation is unprecedented, we are confident that our members, as seasoned exporters, are doing their best to navigate and manage the impact of this new US tariff.”

Meanwhile, other affected manufacturers are exploring adjustments such as operational efficiency upgrades, export diversification, and contract revisions to mitigate the expected tariff pressure and renegotiate pricing with US customers, according to the Federation of Malaysian Manufacturers (FMM).

These renegotiations could lead to lower profit margins or cost-sharing arrangements, depending on demand and supply chain factors, FMM told The Edge on Tuesday. The association has over 450 manufacturers exporting to the US.   

The federation is also anticipating a shift in the regional trade landscape, with countries heavily impacted by US tariffs potentially diverting exports to Malaysia or Asean markets.

"This could result in an influx of lower-cost imports, which may pose a threat to local manufacturers if safeguards are not implemented to manage competitive pressures," FMM added. 

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