Chief minister Chow Kon Yeow said that Penang, which is the country’s most trade-dependent and export-driven state, will establish a tariff monitoring task force and a trade adaptation toolkit.
“The (tariffs) are both challenges and opportunities. We must respond not with fear, but with strategy and resolve,” he told reporters at the Penang Institute after a roundtable with industry players.
“We are not retreating. We are realigning, recalibrating and reaffirming our role as a key economic driver for the nation.”
Chow said the task force will engage affected sectors and “inform (about) responsive policy action”, working closely with federal ministries.
It will also function as a central coordination platform to track trade developments, engage with affected sectors and inform responsive policy action.
The toolkit, meanwhile, will help exporters and SMEs deal with the complexities of tariffs, compliance and origin restructuring.
Chow said the toolkit will also help guide companies in penetrating alternative markets.
“These are not overnight solutions. We will need more time to finalise the mechanisms, consult with stakeholders and secure inter-agency alignment.”
Penang contributed RM76 billion, or 47%, of the country’s total exports to the US in 2023, an Invest Penang handout showed.
The US was Penang’s second-largest export destination last year, accounting for 17% of the state’s total exports. China was first with RM80 billion (18%), followed by Singapore at RM67 billion (15%).
Electrical and electronic products made up RM80 billion (40%) of Malaysia’s total RM199 billion exports to the US in 2024, with semiconductors alone accounting for RM40 billion (20%).
Major industry players and trade groups used today’s roundtable to relay their concerns about the tariffs to Chow, such as concerns about companies moving out of Penang.
Chow also said smaller businesses are worried that cheaper Chinese goods headed to the US might be diverted here, causing small businesses here to lose out.
The tariffs announced by Trump last week sparked the most intense period of financial market volatility since the early days of the Covid-19 pandemic, leading to fears of a global recession.
Asean’s Indo-Chinese member states were the hardest hit by the tariffs, with Cambodia faced with a 49% tariff, followed by Laos (48%), (Vietnam 46%) and Myanmar (44%).
Thailand was hit with a 36% tariff, Indonesia 32%, Brunei and Malaysia 24%, the Philippines 17% and Singapore a baseline tariff of 10%.
On Wednesday, Trump said he would delay the tariffs for 90 days. However, he said a basic levy of 10% on dozens of countries would remain, and that he would raise the tariffs on China from 104% to 125%.