GEORGE TOWN: Penang is exploring alternative markets in Asia and Europe to reduce its dependence on the United States, following concerns over US trade policies, including a 24 per cent tariff on Malaysian products.
Penang Chief Minister Chow Kon Yeow stressed the importance for the state to remain competitive, especially amidst evolving geopolitical and trade policies under the current US administration.
“President Donald Trump wants American factories to go back to the US, so he imposed a high tariff,” he said, when replying to a question from Gooi Hsio Leong (PKR-Bukit Tengah) on the impact of US tariffs on Penang at the state legislative assembly today.
Chow explained this would not happen quickly as relocating was a complex and involved decision.
However, he said Penang must use the time to diversify to avoid being over-reliant on any single market.
Chow said InvestPenang has continuously conducted investment missions to Japan, South Korea, Taiwan, China, Europe, and Singapore to attract new investors.
He added that Malaysia and other Asean countries might face less tense negotiations with the US compared to China.
“However, Malaysia must still be prepared to face a base tariff of 10 per cent and consider making concessions to achieve mutually beneficial outcomes,” he said.
While the Trump administration’s 90-day pause on the tariffs imposed on April 2 has brought respite, Chow said it was important to understand that this is temporary.
Chow then expressed belief that Malaysia’s strategic geographical position, competitive labour costs, and favourable exchange rates will continue to make the country an attractive option for multinational companies (MNCs) looking to diversify their operations.
