Malaysia has issued a stern warning that revoking tariff exemptions on its semiconductor exports would severely harm its industrial competitiveness and strain the global supply chain. As the world’s sixth-largest semiconductor exporter, the country is in a sensitive policy period. In August, the Trump administration imposed 19% tariffs on Malaysian goods, with semiconductors temporarily exempted pending a US national security review. Simultaneously, a proposal for 100% tariffs on chip imports was advanced, limiting exemptions to firms with US manufacturing bases.
In its 2026 economic outlook, Malaysia projected that ending the exemption could cut GDP growth by 0.76 percentage points and reduce trade volumes. Industry analysis suggests the move is part of a broader US effort to reshape the global semiconductor industry, disrupting over $400 billion in trade. As a key packaging and testing hub in Southeast Asia, supply chain disruptions in Malaysia may trigger significant ripple effects.
ICgoodFind : US tariff policies are amplifying supply chain volatility, underscoring the need for resilient sourcing strategies in the semiconductor industry.
