Malaysia says any U.S. tariffs on BRICS nations could impact semiconductor supply

Malaysia has raised concerns over the potential impact of U.S. tariffs on BRICS nations, warning that such measures could disrupt the global semiconductor supply chain. The statement comes after U.S. President-elect Donald Trump proposed a 100% tariff on BRICS countries unless they commit to not creating or supporting a currency that could rival the U.S. dollar.

Malaysia’s Strategic Role in the Semiconductor Industry

Malaysia, a significant player in the global semiconductor industry, accounts for approximately 13% of the world’s chip testing and packaging. U.S. companies are among the top investors in Malaysia’s semiconductor sector, underscoring the interdependence between the two nations.

Trade Minister Tengku Zafrul Aziz stressed that imposing tariffs would harm both Malaysia and the United States, as their semiconductor industries rely heavily on each other to maintain supply chain stability. “Any move to impose a 100% tariff will only harm both parties which are depending on each other for efforts to prevent disruptions in the global supply chain,” he said in a parliamentary statement.

BRICS and De-Dollarization Efforts

BRICS, initially comprising Brazil, Russia, India, and China, has expanded to include other nations and aims to challenge the dominance of Western economies. While the bloc has discussed reducing reliance on the U.S. dollar in trade, no formal decision has been made on creating a common currency.

Malaysia has expressed interest in joining BRICS to align with its goals but has not yet been accepted as a member. Tengku Zafrul acknowledged that Malaysia is monitoring developments closely as BRICS nations explore alternative currencies in response to Western sanctions on Russia.

Global Reactions and Implications

The U.S. proposal has sparked criticism from BRICS nations, with Russia warning that such tariffs would backfire. Moscow argues that compelling countries to depend on the U.S. dollar would accelerate global efforts to switch to national currencies for trade.

Malaysia’s warning reflects broader concerns about the fragility of global supply chains and the potential for geopolitical tensions to exacerbate disruptions. As the U.S. and BRICS navigate this economic standoff, stakeholders in the semiconductor industry and global trade are bracing for potential fallout.

This developing situation underscores the growing economic and strategic importance of Malaysia within the global semiconductor ecosystem and its balancing act amid shifting global alliances.

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