Help Businesses Survive Uncertainty Due To Us China Trade War Govt Told

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Former finance minister Lim Guan Eng said many Malaysian companies were already facing cash flow issues and reduced demand.
BUKIT MERTAJAM: Lim Guan Eng has called on the government to assist businesses amid the economic uncertainty resulting from the ongoing US-China trade war and the tariff imposed on Malaysia.
The former finance minister said the reciprocal tariffs imposed by the US on China and the republic’s subsequent retaliatory levies, along with the 24% tariff imposed on Malaysia would further strain Malaysian businesses.
Lim said many Malaysian companies were already facing cash flow issues and reduced demand.
And while he supported the government’s move to engage the US on the tariffs, Lim said there was a need to help Malaysian businesses.
“Only when we are able to reach a consensus with the US while at the same time supporting our businesses, can we begin to reduce the impact on all parties,” he said at an Aidilfitri open house organised by DAP.
While he did not go into detail on the type of assistance the government should provide, Lim had in February proposed several financial and tax adjustments aimed at reducing business costs, particularly for small and medium-sized enterprises, to mitigate the potential impact of US president Donald Trump’s tariffs.
Yesterday, Prime Minister Anwar Ibrahim said the high tariffs and taxes introduced by the US would have direct implications for Malaysia’s economy, which is heavily reliant on international trade.
Anwar said that as a trading and exporting nation, Malaysia remains highly vulnerable to fluctuations in global trade policy, adding that when the US imposes high tariffs on China, “we will also feel the impact.”
On April 2, Trump announced stiff reciprocal tariffs on scores of countries, including Malaysia.
With financial markets crashing, Trump did a U-turn on Wednesday by pausing implementation of the duties for 90 days on all affected countries except China, which has been punished with a 145% tariff for “showing disrespect”. China has since retaliated with a 125% tariff on US imports.
It was previously reported that investment, trade and industry minister Tengku Zafrul Aziz would be leading Malaysia’s delegation to Washington at the end of the month to discuss the tariff imposed on the country.
Lim said negotiating with the US is the correct approach and stressed that the only real pressure point that could compel Trump to back down on the tariffs is the bond market.
The global bond market, valued at US$52 trillion in total, was enormous, Lim said, adding that of the sum, US$30 trillion consisted solely of US government bonds, which did not include corporate bonds.
“The scale is simply too big to ignore. No one dares to challenge it, not even Trump. Therefore, negotiation is the only right approach.”
Lim added that Malaysia, as a smaller economy, could not afford to retaliate with tariff hikes and should instead pursue negotiations with the US to reduce or remove existing tariffs. - FMT

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