FMM president Soh Thian Lai said the full 24% rate on these products could sharply reduce exports, put pressure on jobs, and force local producers and US-linked multinationals based in Malaysia to adjust their supply chains.

“The broader ecosystem, including suppliers, logistics providers and downstream service sectors, could also be adversely affected by shifts in sourcing and manufacturing decisions resulting from the tariff,” he said in a statement.

Earlier today, it was reported that Malaysia had been hit with a 24% reciprocal tariff by the US, effective April 9.

According to an executive order signed by US president Donald Trump yesterday, Malaysia is one of 49 countries slapped with the tariff.

Trump said the additional ad valorem duty on imports from the trading partners would start at 10% from Saturday, and increase shortly after to the rates specified for the respective countries.

The executive order also specified imports exempted from the reciprocal tariff. They include copper, gold, timber and pharmaceuticals.

In response to the announcement, Soh urged the government to avoid imposing any additional tax burdens this year, given the increasingly challenging economic conditions.

“The manufacturing sector is already under severe cost pressures and is the largest contributor to national tax revenue, accounting for RM221 billion or 68.6% of total tax collections.

“The expansion of the sales and service tax, effective this May, along with the increase in the electricity tariffs in July, will significantly raise compliance and operational costs for mid-tier and large manufacturers, as well as vulnerable small and medium-sized enterprises,” he added.