On April 2, 2025, U.S. President Donald Trump unveiled a controversial new set of tariffs targeting goods from countries with which the U.S. has significant trade imbalances. Under this new tariff plan, Malaysia will face a 24% duty on goods exported to the U.S., effective April 9, 2025. This is part of a broader "reciprocal tariff" strategy aimed at reducing the U.S. trade deficit by imposing higher taxes on products from countries such as China (34%), Vietnam (46%), India (26%), and Malaysia (24%).
The rationale behind these tariffs is that many countries, including Malaysia, have trade practices that the U.S. deems unfair—such as local taxes and currency policies that hinder the competitiveness of American products in these markets. The tariffs are already stirring concerns globally, as they could disrupt supply chains and increase costs for businesses and consumers alike.
The Potential Impact on Malaysian Jobs and Industries
While the tariff war has global implications, the impact on Malaysia could be particularly severe. The Malaysian International Chamber of Commerce and Industry (MICCI) warns that up to 50,000 jobs could be lost as a result of these new tariffs, particularly in key industrial hubs like Penang, Johor, and the Klang Valley. Sectors most at risk include electronics, automotive parts, and rubber goods—industries that are heavily reliant on exports to the U.S.
MICCI President Christina Tee highlighted that this tariff hike is one of the most significant trade challenges Malaysia has faced in recent years. The tariffs threaten to make Malaysian exports, especially in electronics and palm oil, less competitive in the U.S. market. As a result, local manufacturers may need to restructure operations, shift production elsewhere, or even abandon certain markets entirely.
In response, MICCI has proposed the creation of a Tariff Mitigation Council, which would be tasked with helping businesses adapt to the new landscape. The council’s efforts would focus on supporting affected industries, diversifying markets, and negotiating relief through bilateral trade agreements.
How This Affects iPhone Prices: A Price Hike Up to RM10,000?
Perhaps one of the most immediate and visible consequences of these tariffs will be the effect on consumer prices, particularly for popular electronics like the iPhone. Apple’s manufacturing relies heavily on production facilities in China, Malaysia, and Vietnam, and the new tariffs will increase the cost of goods imported to the U.S.
Experts predict that the price of the latest iPhone models could rise by up to 43% due to these tariffs. For example, the iPhone 16, which currently costs around RM3,779, could see its price soar to RM5,400. Meanwhile, the high-end iPhone 16 Pro Max, which retails for USD1,599 (~RM7,143), could jump to USD2,300 (~RM10,275)—nearly RM11,000 if the tariff increases are passed on to consumers.
The tariff shock is expected to affect more than just the prices of iPhones. Apple’s entire product lineup, including Macs and other electronics manufactured in Malaysia, could see price hikes as well. Although Apple has yet to comment on the specifics, analysts warn that these changes may ripple through the entire tech industry, impacting everything from smartphones to computers.
Prime Minister Anwar Ibrahim’s Response: Economic Resilience Amidst Tariff Shock
Amid concerns about the economic fallout from Trump’s tariffs, Prime Minister Anwar Ibrahim has sought to reassure Malaysians that the country will not slip into a recession. In a recent address, Anwar acknowledged the economic challenges posed by the tariffs but emphasized that Malaysia's macroeconomic foundations remain strong. He pointed to robust household spending, solid domestic investment, and a healthy tourism sector as factors that will help buffer the country from the worst effects of the tariff increases.
Anwar also clarified that Malaysia would not resort to retaliatory tariffs against the U.S. but would instead engage diplomatically to safeguard the nation's interests. The government is committed to protecting the economic security of Malaysian workers and businesses, particularly in export-oriented industries.
While acknowledging the challenges, Anwar stressed that Malaysia's long-term economic strategy remains focused on strengthening its global competitiveness and diversifying trade relationships. He also pointed out that Malaysia's membership in various regional trade agreements, such as the ASEAN Economic Community (AEC) and the Regional Comprehensive Economic Partnership (RCEP), will provide opportunities to mitigate some of the damage caused by the U.S. tariffs.
Looking Ahead: How Malaysia Plans to Tackle the Tariff Challenge
As Malaysia grapples with the implications of the new U.S. tariffs, the government is moving quickly to devise strategies to protect key industries and workers. Anwar’s government is actively exploring measures to cushion the impact of tariffs on businesses, including the establishment of a National Geo-economic Command Centre to coordinate efforts across ministries.
The government has also called for a more collaborative approach to addressing the trade imbalance with the U.S., seeking fairer terms and relief for Malaysian exporters. Malaysia will continue to pursue bilateral and multilateral trade agreements to ensure it remains a competitive player on the global stage.
In the face of this tariff shock, Malaysia’s industries must adapt by moving up the value chain, focusing on technology and innovation, and diversifying both suppliers and markets. With continued diplomatic engagement and sound economic policies, Malaysia hopes to weather this storm and maintain its position as a key player in the global economy.
What are your thoughts on this? Let us know in the comments.
*Sources: Visual and Reference Credits to Social Media & various cross-references for context.
FOMO much? Follow our Facebook and Instagram for more updates.