Malaysian exports to US surge 69.1pc to RM282.07b despite tariffs — Johari

KUALA LUMPUR: Malaysia's exports to the United States surged 69.1 per cent to RM282.07 billion in the first nine months of this year, despite additional US tariffs on some Malaysian goods.

Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani said total trade between Malaysia and the US rose 39.6 per cent to RM378.70 billion from January to September.

"This strong export performance was driven mainly by a surge in demand for electrical and electronics (E&E) products, particularly semiconductors, following the rapid development of artificial intelligence (AI) technology and data centres," Johari said in a written parliamentary reply.

He was responding to Amirudin Shari (PH-Gombak), who asked about the impact of US tariffs on Malaysian industries this year and efforts to identify new markets for small and medium enterprises (SMEs).

Johari said Malaysia had also benefited from an exemption from additional US tariffs on most semiconductor and E&E products.

"This decision by the US underscores the reliance of the US supply chain on the E&E sector."

The E&E sector accounts for about 64.2 per cent of Malaysia's exports to the US, with semiconductors making up 44 per cent of E&E exports.

Johari said the ministry had identified products heavily reliant on the US market that were subject to additional tariffs and did not qualify for exemptions.

The US accounts for about 32 to 47 per cent of Malaysia's exports of rubber gloves, furniture and medical devices.

Exports of rubber gloves to the US fell 1.6 per cent to RM5 billion from RM5.1 billion a year earlier.

Furniture exports declined 19.2 per cent to RM3.77 billion from RM4.67 billion, while medical device exports dropped 12 per cent to RM8.74 billion from RM9.93 billion.

He said some key industries had come under pressure to absorb additional tariff costs or offer discounts to buyers to remain competitive and retain access to the US market.

Diversifying export destinations and reducing reliance on any single market remained the best way to limit exposure to external shocks, he said.

The ministry was pursuing free trade agreements and exploring non-traditional markets in the Middle East, Africa, Latin America and South Asia.

It was also supporting SMEs through grants, incentives and trade and investment missions.

Malaysia's rubber glove exports recorded growth in several non-traditional markets, including Oman (712 per cent), Brazil (84.6 per cent), Sweden (80.8 per cent), Denmark (48.1 per cent), the Netherlands (43.7 per cent), Estonia (34 per cent) and Canada (18.4 per cent).

Medical device exports also increased in South Korea (206 per cent), Singapore (74.9 per cent), Sweden (65 per cent), Brazil (59.1 per cent), Türkiye (43.9 per cent), Canada (26.6 per cent) and the United Kingdom (5 per cent).

Furniture exports rose sharply in Guyana (586.1 per cent), Taiwan (140 per cent), Switzerland (135.4 per cent), Vietnam (99 per cent) and New Zealand (68.3 per cent).

Johari said the ministry would keep monitoring US trade policy and act proactively to protect exporters and reduce the tariff impact on SMEs.

The US imposed an additional 10 per cent tariff on nearly all Malaysian exports on July 24 after a Section 301 investigation into forced-labour allegations.

Tariff rates from a separate US probe into industrial excess capacity have yet to be determined.