WASHING TON: A US-CHINA trade war will have severe implications on Malaysia’s economic growth, although the impact may be limited for now.
Asian Strategy and Leadership Institute research and business development director Lau Zheng Zhou said any major disruption to the global trade environment and momentum will significantly affect Malaysia’s attractiveness for investment and hurt its growth prospects.
“In the short term, we may even see a weakening ringgit as investors move to safe-haven assets in US dollars should global trade relations worsen.
Lau also said heavy tariffs imposed by the US will see Malaysian firms being slapped with rising input costs and falling demand for their value-added component products.
Last week, the Trump administration had announced it would impose tariffs worth US$60 billion (RM232.6 billion) on Chinese imports, to which the latter responded by announcing reciprocal measures amounting to US$3 billion, targeting 128 US products including pork, fruit, nuts and steel.
Both countries appear to have backed down from their initial hawkish overtures after reports surfaced last Monday stating that US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer were “actively engaging” with their Chinese counterparts.
