The Labour Solidarity and Learning Resources Association (LLRC) said Malaysia has seen an influx of investments and new manufacturing plants being set up following the US-China trade war and as part of de-risking from geopolitical tension.

LLRC secretary-general N Gopal Kishnam said this had created better job opportunities for workers and brought new technology to Malaysia.

However, he said the new tariff could force the same manufacturing companies to relocate their operations away from Malaysia, leading to factory closures and widespread job losses.

“Tens of thousands of workers in Malaysia could be terminated from employment,” he said in a statement.

Gopal urged Putrajaya to reduce its dependence on foreign direct investments and to fall back on domestic demand instead.

He suggested offering incentives for local industrialists to invest in the Malaysian manufacturing field and other sectors set to be affected by the US tariff, in order to generate more jobs domestically.

He also urged the US government to reconsider its tariff policy and seek a “win-win solution” with the affected countries, saying a trade war would only result in losses for all parties.

US president Donald Trump has signed an executive order imposing reciprocal tariffs on 49 countries, effective April 9.

Malaysia was hit with a tariff of 24%, alongside neighbouring countries such as Thailand (37%), Indonesia (32%), Brunei (24%) and the Philippines (18%).

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