“Unilateral action by any economy now doesn’t work any more because of the global value chain where everybody is dependent on each other.

“For example, if you want to produce an iPhone, the components come from all over the world, including Malaysia,” he said.

The same goes for the US car and aircraft industry. The components would come from all over the world, he said.

“Hence, an open trade war does not benefit anybody, everybody will actually lose,” he said at a briefing for senior editors yesterday, ahead of the release of BNM’s Annual Report 2017 and Financial Stability and Payment Systems Report release here today.

He said this when asked on the impact of US President Donald Trump signing a presidential memorandum that could impose tariffs of up to US$60 billion (RM232 billion) on imports from China and restrictions aimed at preventing Chinese-controlled companies and funds from acquiring US firms with sensitive technologies.

“Such a situation is a risk for economies globally since it would cause the global trade to decline.

“If there is a trade war between nations, then that basically offsets one of the biggest support for growth last year, which is the external factor.

“And if that happens that number (economy growth outlook for Malaysia) has to be re-looked,” he said.

Malaysia’s economy expanded 5.9% in 2017 and it is projected to grow between 5.5-6% this year.

“But I don’t think this trade war will happen. We expect that at the end of the day good sense will prevail,” he said.

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