Malaysia: Any Tariffs Imposed by the US on BRICS Nations Could Impact Semiconductor Supply

Forex - Malaysia stated that the new Trump administration's attempt to impose tariffs due to their efforts to create a new currency for the BRICS countries or to use alternatives to the dollar could lead to disruptions in the global semiconductor supply chain.

Trade Minister Tengku Zafrul Aziz mentioned that Malaysia is closely monitoring developments following the statement that President-elect Donald Trump indicated that BRICS members would face a 100% tariff if they did not commit to not creating a new currency or supporting an alternative to the US dollar.

Tengku Zafrul noted that the United States is Malaysia's third-largest trading partner and that US firms are major investors in the semiconductor sector. He emphasized that Malaysia is a key hub, accounting for approximately 13% of global chip testing and packaging. "Therefore, any move to implement a 100% tariff would harm both parties, which are interconnected in efforts to prevent disruptions in the global supply chain," he stated.

He added that while BRICS countries are discussing reducing their reliance on traditional trade currencies like the US dollar, no formal decision has been made regarding de-dollarization efforts. The group does not have a common currency, but ongoing discussions on the topic have gained some momentum following Western sanctions on Russia due to the war in Ukraine.