24/02/2026

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TUESDAY | FEB 24, 2026

Broad-based US tariff not likely to derail M’sian trade

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

PETALING JAYA: Malaysia’s exports are unlikely to take a direct hit from US President Donald Trump’s latest move to slap a 15% tariff on imports, with economists saying the measure does not single out the country. BIMB Securities chief economist Imran Nurginias Ibrahim noted that the newly announced tariff framework is being framed as a temporary, broad-based levy rather than a country- or product-specific action. That distinction is important for Malaysia, he said, as exporters are not being explicitly targeted. “Overall, Malaysia’s diversified export base and deep integration into regional supply chains should help cushion temporary policy volatility, while a sustained improvement in global policy clarity would further reinforce the country’s external and financial resilience,” he told SunBiz . Given the time-bound nature of the measure, Imran said the near-term impact on trade flows and export volumes is likely to be contained. “Businesses may face heightened cost considerations and planning uncertainty, but these effects are more sentiment-driven and operational in nature rather than indicative of a structural disruption to trade relationships.” From a competitiveness perspective, he said the risk of material erosion appears limited in the short term. “A uniform, economy-wide tariff applied across exporting nations preserves relative positioning among regional peers, reducing the likelihood of immediate trade diversion away from Malaysia.” Moreover, he said Malaysia’s strength in electrical and electronics (E&E) and intermediate goods exports – largely positioned upstream within global value chains – provides an additional buffer, as demand in these segments tends to be driven by broader production cycles rather than bilateral tariff shifts alone. “Any near-term impact would more likely manifest through margin compression or pricing adjustments rather than a relocation of production.” He explained that the recent US Supreme Court ruling limiting the president’s unilateral tariff authority is broadly constructive for global economic and market sentiment. “The decision reinforces the effectiveness of institutional checks and balances in the US policy framework, thereby reducing the probability of abrupt or sweeping trade measures that could destabilise global supply chains. “For an open and trade-dependent economy

represents a step down from the previously discussed 19% tariffs under unratified reciprocal trade deals, which may ease some pressure. “Nevertheless, ambiguity remains as the existing reciprocal trade arrangement, though agreed upon but not yet ratified, could result in the 19% rate remaining in place for the time being,” he said. In the short term, he said the impact will likely be concentrated on price-sensitive exports to the US, particularly in manufacturing and consumer goods sectors such as rubber and palm oil. “The medium-term effects will depend largely on how firms and global buyers reconfigure their supply chains,” he said. Woon said Malaysia’s relatively diversified export base and existing policy buffers suggest that the country can manage the shock. “However, proactive diversification, targeted support for affected firms, and continued upgrading of supply chains will be important to mitigate downside risks.” Meanwhile, he said the ringgit has strengthened sharply, touching an eight-year high against the US dollar. “This appreciation is partly due to broader US dollar weakness, driven by uncertainty surrounding the tariff policy and perceptions that institutional checks may limit the extent of Trump’s trade agenda.” He said while a stronger ringgit may pose challenges for some exporters, the short-term market reaction appears broadly supportive for the currency. “Markets seem to be pricing in relief from more severe tariff scenarios rather than reacting with panic to the new levy.” He added that Miti is currently reviewing the implications and coordinating with Asean partners and US counterparts, with further announcements from Miti expected to provide clearer direction on Malaysia’s policy response. “I believe targeted support measures for affected sectors, such as export financing and credit support or temporary tax or cost relief for affected exporters, could help ease uncertainty and cushion potential economic impacts,” he said. due to timing adjustments to trade payable payments, as well as higher depreciation and finance costs at Pengerang Petrochemical. The specialty chemicals portfolio saw weaker performance amid a volatile market conditions, persistent pricing pressure and widening regional disparities. Oversupply from Asia Pacific maintained competitive intensity and depressed prices, with the impact amplified by trade tensions and tariff uncertainties. Performance was additionally affected by lower sales volumes, mainly in the intermediates business unit, higher operating expenses, asset impairments, and unfavourable net foreign exchange movements. Petronas Chemicals managing director and CEO Mazuin Ismail said the group remained steadfast in safeguarding its fundamentals and strengthening operational resilience. He said throughout the year, the group navigated a complex mix of external and internal challenges that required continuous recalibration to sustain performance and delivery.

o Economists say 15% levy not expected to have near-term impact on exports or foreign direct investment decisions

Imran: No country specifically targeted.

Sedek: US trade policy remains fluid.

Woon: Renewed geopolitical tension.

route, the administration has shown willingness to pivot to alternative mechanisms. Uncertainty has not disappeared – it has merely changed form,” he said. Sedek said for Malaysia, the development does not translate into a significant or immediate economic shock, as the measures are temporary and broad-based rather than targeted specifically at the country. “The real impact is more on sentiment and business planning rather than on actual trade flows or foreign direct investment decisions,” he said. He reiterated that Malaysia should avoid overreaction and maintain a wait-and-see approach, while continuing to rely on trade diversification and geo-economic hedging as more effective long-term strategies. Monash University Malaysia Department of Management School of Business senior lecturer Andrew Woon said the tariff increase from 10% to 15%, effective today, introduces renewed geopolitical tension between the US and its global trading partners. However, he noted that the 15% rate

such as Malaysia, this development helps to moderate downside risks to global growth and supports a more stable external demand environment,” he said. In turn, Imran said this could provide a modest tailwind to Malaysia’s exports, underpin investor confidence in domestic capital markets, and contribute to a firmer ringgit trajectory against the US dollar, particularly if global risk appetite improves. “That said, the court’s ruling addresses constitutional boundaries rather than trade policy direction. The Trump administration retains alternative channels to implement protectionist measures, notably through Section 122 of the Trade Act of 1974, which permits the imposition of tariffs of up to 15% for a maximum of 150 days unless extended by Congress,” he said. IPP Global Wealth country economist (Malaysia) Mohd Sedek Jantan said the event highlights that US trade policy remains fluid rather than fully stable, even after judicial intervention. “While the court has limited one unilateral

Petronas Chemicals slips into RM2.1 billion net loss in FY25 PETALING JAYA: Petronas Chemicals Group Bhd (PCG) posted a net loss of RM754 million for the fourth quarter ended Dec 31, 2025 (Q4 FY25), a 245.28% year-on-year decline from a net profit of RM519 million in Q4 FY24. However, softer product prices, narrowing spreads and continued market oversupply, particularly in the olefins and derivatives (O&D) and specialities markets, drove Ebitda down 46% year on year to RM1.9 billion. at PC Fertiliser Sabah. The group also faced production interruptions due to an unscheduled utilities outage at the Kertih Integrated Petrochemical Complex in January and feedstock disruptions at PC Fertiliser Kedah following the Putra Heights incident in April 2025.

PCG declared a second interim dividend of 4 sen per ordinary share, returning RM320 million to shareholders and reinforcing its continued commitment to delivering value even in a challenging operating environment. In a separate statement, Petronas Chemical said the chemicals sector faced a challenging year in 2025, marked by persistent overcapacity, subdued global demand and rising competitive pressure across Asia Pacific as new capacities came online. Prolonged oversupply from Northeast Asia and the Middle East, coupled with shifting geoeconomic policies, trade tensions and tariff related disruptions continued to weigh on market access, pricing and margins. The group achieved a plant utilisation rate of 88% for the year, despite heavy planned maintenance work, including turnaround activities

In a filing to Bursa Malaysia, PCG said revenue for the quarter declined 11.5% year-on-year to RM6.60 billion from RM7.45 billion posted in Q4 FY24. For FY25, PCG posted a net loss of RM2.1 billion, a 282.3% decline year-on-year from a net profit of RM1.17 billion in FY24. The decrease was primarily due to lower earnings before interest, tax, depreciation and amortisation (Ebitda), asset impairments at Perstorp and lower finance income from timing adjustments to trade payable payments, as well as an unrealised foreign exchange loss from the revaluation of a shareholder loan to Pengerang Petrochemical Company Sdn Bhd. Revenue for FY25 stood at RM27.48 billion from RM30.67 billion previously, supported by steady sales volumes across both commodity and specialities portfolios.

Further, the group said it demonstrated resilience across its diversified portfolio, supported by the strong performance of the fertiliser and methanol (F&M) segment. This was driven by stable urea demand in India, Australia and Latin America, as well as higher methanol sales through its strategic sourcing initiatives. The O&D segment recorded softer performance due to lower average product prices, driven by weak downstream demand and ongoing geoeconomic tensions, as well as lower sales volumes. Segment results were further impacted by the strengthening of the ringgit against the US dollar and higher unrealised foreign exchange loss from the revaluation of payables, lower finance income