Ali Salman, the CEO of the Institute for Democracy and Economic Affairs, and Yeah Kim Leng, a professor at Sunway University’s business school, told FMT the situation presented Malaysian exporters an opportunity to offer their products to the American and Chinese markets.
Ali said China’s move to place tariffs on US soybean oil, for example, might be good for Malaysian producers of palm oil.
“Similarly, the tariffs imposed by the US on imports of China-made computers will make Malaysian-made computers more appealing to importers in the US,” he added.
“In the short run, the biggest losers are consumers in China and the US.”
Yeah, while agreeing that there would be short-term gains for Malaysian exporters, was less upbeat. He said the gains were not expected to be large.
Both he and Ali said the long-term outlook would be quite bleak.
Ali said the row between the superpowers would eventually affect the global value supply chain and Malaysia and other countries would, in the long run, feel the negative impact, such as through price increases.
But he said Malaysia might be less affected than some other countries because it produces its own commodities as well as sophisticated electronics products.
Yeah said global economic growth would be affected even in the medium term because the trade war would lead to lower consumption in both China and the US.
“When the two largest economies in the world see their growths drop, global trade will slow down and in the end Malaysian exports will be affected,” he said.
He predicted increased market uncertainty globally and said this would lower investor confidence and lead to a decline in business and consumer spending.
Recently, China unveiled plans for retaliatory tariffs, targeting US exports such as soybeans and cars, after Washington proposed a 25% tariff on 1,300 industrial, transport and medical groups, which could hurt Chinese producers.
US stocks jump as investors reassess trade war risk, Dow +1.0%