Malaysia Could See More US Companies Shifting Into the Country

MALAYSIA could expect to see more US firms establishing their presence in the country as the Sino-US trade war continues to drag on without much signs of cooling off.

Sunway University Business School economist Prof Dr Yeah Kim Leng said Malaysia is one of the key beneficiary countries that could take advantage of the trade diversion, which is a result of the ongoing trade war.

“It is not surprising. American importers are trying to diversify their imports away from China because of the 25% tariffs which are quite substantial.

“In the case of Malaysia, American companies in Malaysia would likely be ramping up their production — especially to substitute for imports from China.

“That is one of the contributing factors for Malaysia’s better than expected export performance in the last few months,” he told The Malaysian Reserve yesterday.

Yeah said the increase in Malaysian exports is among the economic indicators that are pointing towards trade diversion effects.

“We have seen an increase in exports for certain products to the US, whereas China’s exports to the US have correspondingly declined.

“But we also have to be cautious — largely because US Customs can also impose tariffs if they suspect there is a circumvention of tariffs by exporting through other countries,” he said.

According to a report by AFP recently, big US firms are expediting efforts to move more of their supply chains from China to neighbouring countries, including Malaysia, in light of the Trump administration’s tariffs.

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