KEEP CALM AND COORDINATE WITH ASEAN
Malaysia’s leaders and officials should continue to reassure traders and investors that it remains committed to open trade and investment. The government is steering clear of retaliatory tariffs and has established a National Geoeconomic Command Centre and a Ministry of Investment, Trade and Industry taskforce to monitor developments in consultation with stakeholders.
ASEAN Economic Ministers promptly met on Apr 10 and have collectively resisted retaliatory tariffs. Malaysia further using its chairmanship to forge ASEAN unity could help smooth supply chain adjustments and ease investor concerns.
As Vietnam’s failed attempts to offer tariff concessions show, the Trump administration is more interested in upending the international trading system and seeing countries capitulate. Malaysia and ASEAN countries should also deprioritise negotiating – individually or collectively – with the US, and direct official energies towards mutually beneficial partnerships and monitoring sector-specific developments.
It bears remembering that major economic shocks typically do greater harm to vulnerable people, smaller businesses and poorer countries. Both wealthier countries and citizens recovered faster from the COVID-19 pandemic, and smaller companies were the biggest losers from Brexit.
With the US seemingly intent on creating vulnerability, countries including Malaysia must reinforce efforts to reduce it.
Dr Stewart Nixon is the Deputy Director, Research at IDEAS (The Institute for Democracy and Economic Affairs) Malaysia.
