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The government has been urged to intensify engagement sessions with state governments to address the impact of retaliatory tariffs imposed by the United States.

Tuaran MP Datuk Seri Wilfred Madius Tangau (Upko) said this would help identify short-, medium-, and long-term challenges, allowing Malaysia to better mobilise natural and human resources, particularly to boost downstream industries like palm oil in Sabah.

He also called for full federal support for the Lahad Datu Free Trade Zone and solutions to Sabah’s critical water and electricity issues that hinder industrial growth.

Given Sabah’s strategic location and resource potential, Madius proposed forming a federal-state task force to coordinate responses to the tariffs.

He noted that although the tariffs take effect on July 1, their impact is already visible in falling global commodity demand and prices, with crude palm oil and petroleum dropping 17 percent and 14 percent respectively.

He said, Sabah, which exports RM400 million to the U.S., could see reduced revenue and may miss its RM6.44 billion collection target due to lower commodity taxes.