Trump Wins, So What Does That Mean For Malaysia?

Trump’s second presidency might have similar effects on Malaysia as his first term back in 2016.

The 2024 US presidential elections, which ended yesterday (6 November), saw Republican candidate Donald Trump winning the White House over Democrat Kamala Harris.

Trump is now set to be inaugurated as the 47th President of the United States on 20 January, 2025.

The election results sent waves across the globe while the world braces itself to see what Trump will do and how it will impact the economy, now that he is at the reins again.

Trump’s trade policies and de-dollarisation will affect Malaysian trade exports

In a report by The Star, Prof Emeritus Dr. Barjoyai Bardai at Malaysia University of Science and Technology (MUST) said Trump’s trade policies will affect Malaysia, especially with increasing sentiment to move away from the use of the US Dollar due to US-China competition.

“Malaysia could be affected by Trump’s presidency if he can’t solve the country’s issues with China,” he said in the report.

International Islamic University Malaysia political analyst Dr Tunku Mohar Tunku Mohd Mokhtar said, “The United States is one of Malaysia’s trading partners and any hike in the US import tariffs would hurt our exports to the United States. Being a ‘partner country’ of BRICS (that advocates de-dollarisation) would make Malaysia a target.”

BRICS, was comprised of Brazil, Russia, India, and China in 2009 as a cooperation platform for emerging economies, with South Africa joining in 2010. Malaysia was officially made a partner country on 26 October this year.

A Reuters report said Trump has plans on implementing trade policies that include higher tariffs (10% or more) on imported goods which he said would eliminate the trade deficit. Critics say this would lead to higher prices for American consumers and global economic instability.

The president-elect has targeted China in particular, proposing to phase out Chinese imports of goods such as electronics, steel, and pharmacueuticals over 4 years.

In addition, he is also seeking to prohibit Chinese companies from owning real estate and infrastructure in the US energy and tech sectors.

Busines Today said in a report that Trump’s plans to impose tariffs as high as 60% on Chinese products could have significant implications on Malaysia as one of the major exporters of electronic products and components to the US.

If high tariffs are applied to Chinese goods, Malaysian products incorporating Chinese components could also be impacted, diminishing US demands for Malaysian exports.

Ringgit expected to grow weaker against the US Dollar by year-end

A New Straits Times report said there will be near-term weakness in the Ringgit following Trump’s return to presidency, with projections reaching 4.5 against the Dollar by the end of the year.

Another report by Malay Mail said the ringgit, Southeast Asia’s best-performing currency this year fell by 1.3% to its lowest since mid-August, ahead of an interest rate decision.

However, the ringgit did open higher despite the stronger US Dollar on Trump’s return to presidency.

The ringgit stood at 4.3 against the US Dollar at 8am today, rising from yesterday’s close of 4.4.

Plan for mass deportations and migrant policies

Trump said he plans to reinstitute his “travel ban” from 2017 that restricts entry into the United States from a list of Muslim-dominant countries.

The list included Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen at the time. Although Malaysia was not included in the list, there is no telling what the future holds.

His new immigration policies will also seek to end automatic citizenship for children born to immigrants, which goes against the country’s 14th amendment.

The 14th Amendment granted citizenship to all persons “born or naturalized in the United States,” including formerly enslaved people, and provided all citizens with “equal protection under the laws.”

Impact of Trump’s first presidential term on Malaysia

When Trump became president back in 2016, the tariffs he implemented and the trade war he waged with China disrupted Malaysia’s export markets, causing uncertainties for businesses dependent on the US-China trade.

As tensions between the US and China escalated, Malaysia had to carefully balance its trade and diplomatic ties with both global powers.

However, several key sectors in Malaysia have attracted significant foreign direct investments (FDI), among them being the electrical and electronics, semiconductors, and green technology industries.

The strict US immigration and visa policies during this time affected Malaysian students and professionals, limiting opportunities in the States.

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