MALAYSIA AND ASEAN MUST BE PREPARED – TRUMP’S PAUSE ON TARIFFS IS UNCERTAIN, AND SMALL ECONOMIES REMAIN VULNERABLE

Malaysian Consultative Council of Islam Organizations
Space U8 , Eco Mall , Bukit Jelutong , Shah Alam Selangor , Malaysia
azmiabdulhamid58@gmail.com
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PRESS RELEASE
15th April 2025

The Malaysian Consultative Council of Islamic Organization (MAPIM) expresses grave concern over the renewed uncertainty in global trade dynamics following the U.S. President Donald Trump’s statement to “pause” for 90 days on countries which US has set new increased tariffs . While presented as a tactical recalibration, such a move does not resolve the underlying tensions in the ongoing U.S.-China trade war. Instead, it adds another layer of volatility and unpredictability, especially for developing and export-reliant economies.

The Direct U.S.-China Trade War: A Global Chain Reaction

The U.S.-China trade war, which has spanned several years, is no longer a bilateral issue—it is a systemic conflict with consequences that ripple across the entire global economy. Malaysia, as a trade-dependent nation, and ASEAN as a whole, stand at the fault lines of this economic confrontation.

The impacts can be viewed at three key levels:

1. National Level (Malaysia):

Supply Chain Disruption: Malaysian manufacturers involved in electronics, semiconductors, and raw materials face mounting uncertainty over tariffs and shifting demand.

Export Market Instability: U.S. or China’s retaliatory policies could reduce Malaysia’s access to vital markets or alter price competitiveness.

Ringgit Vulnerability: Currency fluctuations triggered by global market tension could strain Malaysia’s economy and consumer purchasing power.

2. Regional Level (ASEAN): Polarization Risk: ASEAN members may be pressured to align economically with either Washington or Beijing, threatening regional neutrality and cohesion. Investment Shifts: Foreign Direct Investment (FDI) patterns may realign unpredictably, impacting ASEAN’s development agendas and job markets. ASEAN Supply Chains : Integrated regional supply chains could be severely disrupted, harming SMEs and regional production networks.
3. International Level: Global Recession Threat: Prolonged tariff escalations could push the global economy toward contraction, particularly if multilateral institutions remain ineffective. Collapse of Multilateralism: The weakening of the World Trade Organization (WTO) and erosion of global trade norms could legitimize protectionist and unilateral policies. Food & Resource Security: Trade conflicts may extend beyond goods to critical sectors like food, energy, and medical supplies, sparking shortages and price hikes globally. A Call to Action

MAPIM urges the Malaysian government and ASEAN leaders to develop preemptive strategies in response to the escalating U.S.-China trade tensions and the unpredictability of U.S. trade policy under future leadership. We recommend the following:

1. Diversify Trade Alliances: Build new and equitable partnerships with South-South economies and emerging markets beyond the U.S. and China.
2. Fortify Regional Trade Architecture: Accelerate the implementation of frameworks like RCEP and strengthen ASEAN economic integration.
3. Champion Global Trade Justice: Malaysia and ASEAN must take leadership roles in advocating for a fair, transparent, and rules-based trade system at international forums.
4. Enhance Domestic Economic Resilience : Increase national investments in strategic industries, digital infrastructure, and food sovereignty.

The era of economic confrontation between superpowers is not ending—it is transforming. For smaller economies, especially those in the Global South, this reality demands foresight, unity, and bold policymaking. A reactive posture will not suffice. It is time to be proactive, strategic, and united in safeguarding our national and regional interests.

Issued by:

Mohd Azmi Abdul Hamid
President, MAPIM
Kuala Lumpur, Malaysia