FMM survey finds moderate impact of US tariffs

2026-03-17 - 10:34

The FMM survey found 22% of respondents reported reduced orders from customers supplying the US market, 19% faced requests for price cuts from downstream exporters, and 8% experienced cancellations or deferrals of orders linked to US demand. (Website pic) KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) says a survey it conducted has found that the tariffs imposed by the United States have had a moderate impact on Malaysian exporters, with 49% of the firms in the study reporting no significant effect on their operations. FMM president Jacob Lee said the survey of 631 respondents from 15 industry sub-sectors found that around 25% of respondents experienced margin compression, while 21% reported reduced orders from direct US buyers or intermediate customers, as a result of the tariffs. Speaking to the media during the release of FMM’s latest business conditions survey, Lee said 22% of respondents reported reduced orders from customers supplying the US market, 19% faced requests for price cuts from downstream exporters, and 8% experienced cancellations or deferrals of orders linked to US demand. “About 34% of respondents said Malaysia’s pricing has weakened relative to other sourcing locations, while 22% said tariff costs could not be fully passed on to buyers, thereby reducing overall profit margins,” he said. Last month, Prime Minister Anwar Ibrahim said local businesses had largely been unaffected by the US tariffs, which mainly targeted American companies operating or trading within the US. The US government had imposed a reduced tariff rate of 19% from 25% on Malaysia effective Aug 1, 2025. Malaysia and the US signed a reciprocal trade agreement (ART) when US president Donald Trump visited Kuala Lumpur for the Asean summit last year, which maintained the 19% tariffs but allowed certain products to enjoy zero tariffs under aligned partner-trade lists. The US Supreme Court ruled last month that Trump had exceeded his authority in implementing the tariffs, with investment, trade and industry minister Johari Ghani last week stating that the ART had been nullified following the US Supreme Court ruling that struck down the tariffs.