KUALA LUMPUR (March 31): Malaysia’s exports have stayed strong despite rising US tariffs, supported by its role in global supply chains and diversified exports.
Its resilience comes from being part of the global tech supply chain, having a wide mix of products, and strong links within regional trade — helping it absorb shocks while continuing to grow, according to Bank Negara Malaysia’s (BNM) box article entitled “Disentangling Malaysia’s Value Chains in the Age of Turbulence” in its Economic and Monetary Review 2025.
The country’s electronics and electrical (E&E) products, including semiconductors and integrated circuits, formed the backbone of this resilience. Even as tariffs increased, strong US demand for technology products supported Malaysian exports across multi-stage production networks.
A key factor is the diversification of both demand and input sourcing. By spreading production across multiple suppliers and markets, Malaysian firms absorbed trade shocks while keeping operations running smoothly. In 2025, exports to the US grew, driven largely by semiconductor devices — many of which were also exempt from tariffs.
Export composition and effective tariffs also played a role. Compared with regional peers, Malaysia faced relatively low tariff burdens, so firms experienced smaller cost pressures despite headline trade tensions. Data from S&P Global shows that as US tariffs on Chinese goods rose, US imports from China fell, while imports from regional suppliers like Malaysia increased — demonstrating Malaysia’s ability to capture market share amid shifting trade flows.