I Told You So They Did Not Do Anything Tariff Is 25 An Increase Of 1

---

 If you wish to open your heretofore closed Trading Markets to the United States and eliminate your Tariff and Non Tariff Policies and Trade Barriers we will perhaps consider an adjustment to this letter.  


We have had years to discuss our Trading Relationship with Malaysia, and have concluded that we must move away from these longterm, and very persistent, Trade Deficits engendered by Malaysia’s Tariff and Non Tariff Policies and Trade Barriers. Our relationship has been unfortunately, far from Reciprocal. 
 
Please understand that these Tariffs are necessary to correct the many years of Malaysia’s Tariff and Non Tariff Policies and Trade Barriers causing these unsustainable Trade Deficits against the United States.  
- Donald J Trump
 

 
 
 
Well folks, President Donald Trump has written a letter to us. Here is Trump's letter, slightly adapted. 


the United States of America has agreed to continue working with Malaysia, despite having a significant Trade Deficit with your great Country. 
we have decided to move forward with you, but only with more balanced, and fair, TRADE. 
Therefore, we invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far. 
We have had years to discuss our Trading Relationship with Malaysia, and have concluded that we must move away from these longterm, and very persistent, Trade Deficits engendered by Malaysia’s Tariff, and Non Tariff, Policies and Trade Barriers. Our relationship has been, unfortunately, far from Reciprocal. 
Starting Aug 1, 2025, we will charge a Tariff of only 25% on any and all Malaysian products sent into the United States, separate from all Sectoral Tariffs. Goods transshipped to evade a higher Tariff will be subject to that higher Tariff.  Please understand that the 25% number is far less than what is needed to eliminate the Trade Deficit disparity we have with your Country. 
As you are aware, there will be no Tariff if Malaysia, or companies within your Country, decide to build or manufacture product within the United States and, in fact, we will do everything possible to get approvals quickly, professionally, and routinely — In other words, in a matter of weeks.

If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 25% that we charge. 
Please understand that these Tariffs are necessary to correct the many years of Malaysia’s Tariff, and Non Tariff, Policies and Trade Barriers, causing these unsustainable Trade Deficits against the United States. This Deficit is a major threat to our Economy and, indeed, our National Security!

If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff, and Non Tariff, Policies and Trade Barriers, we will, perhaps, consider an adjustment to this letter. These Tariffs may be modified, upward or downward, depending on our relationship with your Country. You will never be disappointed with The United States of America.

Thank you for your attention to this matter!

With best wishes, I am,
Sincerely,

DONALD J. TRUMP
PRESIDENT OF THE UNITED STATES OF AMERICA


MY COMMENTS: TUAN-TUAN I TOLD YOU SO. THEY DID NOT DO ANYTHING. TARIFF INCREASED BY 1% TO 25%. 
 
From April until now they did not achieve anything with the United States.  Donald Trump says,   If you wish to open your heretofore closed Trading Markets to the United States and eliminate your Tariff and Non Tariff Policies and Trade Barriers we will perhaps consider an adjustment to this letter
 
This is is referring to the many, many, many non-tariff barriers like the APs, the highly restricted monopoly import licenses (for example rice imports), the quota restricted industries, the license restricted oligopolies and then the tariff barriers like the more than 100% duties, levies, excises etc on imported motor vehicles etc. 
Trump says "if you eliminate your tariff and non tariff barriers" then the United States will also consider an adjustment to their tariffs.
Tuan-Tuan this will kick in beginning August 1st. But believe me the negative effects of these tariffs start TODAY.
Yesterday I was researching Malaysian exports to the US. There are many, many exports. For example we export specially manufactured wooden floorboards which are used to make those huge American trailer trucks (the Americans call them 18 wheeler semis, picture below). 


Now those wooden floorboards will be subject to a 25% US tariff. For every US$1000 of product they will now have to pay US$1250. Its that simple.
So now, compared to Malaysia, other countries which make wooden floorboards for 18 wheeler semi trucks who suffer less US tariff will get more orders from the US. Plus also domestic American manufacturers who can deliver for under US$1250 equivalent will get more orders. Say an American manufacturer can deliver floorboards for US$1150 of product equivalent will get more orders than a Malaysian exporter who now must sell at US$1250. 
Meaning the American orders for 18 wheeler truck hardwood floorboards from Malaysia will take a hit. Now multiply this across the thousands of products exported from Malaysia to the United States. Our economy will get hit.
Now here is where this analysis gets interesting. 
So when will all this kick in? It starts today. Malaysian exporters will already see a cancellation or reduction of their export orders to the United States. Especially manufacturing companies who export to the US will be hit. The stock market will possibly remain sideways.
Here is today's KL Stock Exchange. Sudah pengsan. Market has fallen 7 points by 12 PM.
 


Now who are the people who are not really worried?  
1.  The super rich elites who control import licenses and permits, who control APs, monopoly import licenses, oligopoly licensed businesses, the kartel daging types etc  do not have much to worry about.  Their yachts, private jets, houses in London, luxury cars, Mercedes and Rolls Royces will not be affected as much.  Why? Because what Donald Trump says "If you wish to open your heretofore closed Trading Markets to the United States, and eliminate your Tariff and Non Tariff Policies and Trade Barriers, we will, perhaps, consider"  is just not going to happen.
 
2. So now we come to the soalan bodoh: 
Who are the  people who will suffer most? Or who will pay most? Or will continue to pay more? Every morning when they wake up they will still be pokai - not enough money in the pocket. The answer is, Jeng Jeng Jeng: YOU !!YOU will continue to pay more. 

 
3.   What about the politicians? Are the politicians worried? It depends on whether they are Malay or non-Malay politicians.  It depends on whether they depend on the Malay votes or non-Malay votes.  If they are from Kedai Lalat or Kampong Seluar Terbakar (these are real places) you can guess their voter profile.
Are Malays involved in exporting much to the US market? Is there any Malay manufacturer of engineered floorboards for semi trucks  exporting to the US market? Your guess is as good as mine. 
But plenty of Chinese are involved in the manufacturing and export industries. So which voter is more important for which politician?
4. What about factory workers? What if US export orders dry up and Malaysian factories start closing down? Who will lose their jobs first? Well there are thousands upon thousands of Bangla factory workers.  The Banglas will lose their jobs first. Banglas are not voters. Not yet.
5. The largest importers of motor vehicles in the country are the GLC owned companies. The biggest government linked trust fund in the country pays its 4.5% annual dividend from selling imported cars at the super inflated prices.  If we listen to Donald Trump and cut our import tariffs, then car prices will drop and these foreign car importers will end up making less profits. That 4.5% annual dividend can be adversely affected. Nanti malu lah kalau dividen jatuh lagi. It can become a political embarrasment.  So they are safe - for the moment. Car prices will remain as they are.
Donald Trump is saying 'Let us both cut our tariffs. Lets engage in free and open trade'.  Dulu-dulu Hadi Awang's ancestors pun pakai cawat. At that time we may have needed the tariffs and closed markets. But I do not agree with that. We do not need them anymore. Tariffs, permits, licenses, APs, quotas only increases the cost of living for the people. And makes the rich richer.
Lets say the Majlis Daerah Tanjong Malam has a weekly pasar malam. Traders from Tanjong Malam are allowed to trade normally. ALL other traders from outside Tanjong Malam must pay a special tariff of 25% to the Majlis Daerah. It means instead of RM10 per kilo of rambutan, they must now sell at RM12.50 per kilo. But their rambutan is good quality so it can still sell. Then the other Tanjong Malam traders will also increase their selling price from RM10 per kilo to say RM11 per kilo. Still can sell. If their rambutan is of slightly better quality they will sell it at RM12 per kilo. Still can sell. So the price of all rambutans will go up. WHY? Because of that 25% tariff by the Majlis Daerah. Who will end up paying more?
 
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.
By Syed Akbar Ali 

---