Malaysia Can Increase Foreign Investor Appeal Despite US Policy Challenge -- MIDA

BANGI, Feb 12 (Bernama) -- Despite facing geopolitical challenges, Malaysia can still attract more foreign investments, especially from companies in countries affected by US trade policies, according to the Malaysia Investment Development Authority (MIDA).

Deputy chief executive officer (investment development) Zalina Zainol said the risk of negative impact on Malaysia’s export performance, particularly semiconductors, is minimal because the tariff hikes by the US do not directly involve Malaysia. However, she warned that additional tariffs on all global imports could lead to increased prices and production costs for Malaysia’s exports to the United States.

“This development could disrupt the supply chain and eventually affect the competitiveness of certain products or industries,” she said during a discussion session titled “Trump and the World: Implications for Malaysia,” at Universiti Kebangsaan Malaysia (UKM) here today.

Zalina noted that during a recent parliamentary session, the Minister of Investment, Trade, and Industry, Tengku Datuk Seri Zafrul Abdul Aziz, emphasised that the government is proactively working to maintain and strengthen trade and investment relations with the US. “This effort is crucial to ensure that Malaysia is not subjected to tariff increases, as seen with China, Canada, and Mexico. The tariffs imposed on these countries stem from issues beyond trade and investment,” she said.

She added that Malaysia’s open economy exposes the country to global uncertainties arising from geopolitical tensions and changes in US policies.

The United States has been Malaysia’s third largest trading partner since 2015, with 13.2 per cent of Malaysia’s total exports last year going there.

Among Malaysia's key exports to the US are electrical and electronics (E&E) products, machinery and equipment, and rubber products. In 2024, E&E products accounted for 40 per cent of Malaysia’s total exports, with 64 per cent being semiconductors.

Zalina highlighted that the US is among the top three destinations for Malaysia’s semiconductor exports, alongside China and Singapore. “This highlights the importance of the bilateral relationship between Malaysia and the US for the country’s economic growth,” she said.

-- BERNAMA