Malaysia may face more stringent trade measures from the United States if it does not adequately address American concerns over structural excess capacity and transshipment controls, warns industry expert Datuk Seri R. Jeyenderan. He cautioned that the current 10% tariff imposed by the U.S. on Malaysian goods should not be viewed as a permanent threshold. This warning comes as Malaysia remains under scrutiny from a U.S. investigation that could result in further actions if the concerns aren’t satisfactorily resolved.
Jeyenderan emphasized the need for Malaysian exporters to be vigilant during this period of investigation. He advised that the country’s Ministry of Investment, Trade and Industry (MITI) and Customs Department should gather and verify industry data, enhance cargo traceability, and enforce trade and labor regulations effectively. These steps are crucial to ensuring that Malaysian goods are genuinely produced domestically and not merely routed through Malaysia from other countries, a practice known as transshipment.
Strengthening transshipment controls, according to Jeyenderan, is vital to prove the authenticity of Malaysian-origin goods. Such measures would help demonstrate to U.S. authorities that Malaysia is committed to addressing their concerns. Additionally, he highlighted the importance of clarifying rules related to petroleum cargo storage, blending, declarations, and tax treatment. These clarifications would help reduce business uncertainties and bolster Malaysia’s position in the ongoing investigation.
In his remarks, Jeyenderan stressed that any weaknesses found by the U.S. investigation should be addressed by Malaysia promptly and transparently. He reiterated that the country must show that its trade rules are not only established but also properly implemented, monitored, and enforced. By doing so, Malaysia can present itself as a reliable trading partner that adheres to international trade regulations, potentially preventing any further escalation in tariffs or trade restrictions.