Malaysia Hit With 24% Reciprocal Tariff!

Malaysia has been hit with a 24% reciprocal tariff by the US, effective April 9. According to an executive order signed by US president Donald Trump on 2^nd April, Malaysia is one of 49 countries slapped with reciprocal tariffs. Other countries include Cambodia (49%), Laos (48%), Vietnam (46%), Myanmar (45%), Thailand (37%), China (34%), Indonesia (32%), Brunei (24%), and the Philippines (18%). The highest rate of 50% was imposed on Lesotho, and the lowest of 11% on the Democratic Republic of Congo. 

In the executive order, Trump said it was the US’s policy to rebalance global trade flows by imposing the additional ad valorem duty on all imports from the 49 trading partners. The additional ad valorem duty on imports from the trading partners would start at 10% from Saturday, and increase shortly after to the rates specified for the respective countries. Importers of goods from Singapore, which is not among the countries facing higher duties, will be subject to the standard 10% tariff. 

The US president highlighted the lack of reciprocity in his country’s bilateral trade ties, disparate tariff rates and non-tariff barriers, as well as its trading partners’ economic policies which he said suppressed domestic wages and consumption. The executive order also specified imports exempted from the reciprocal tariff, including copper, gold, timber, and pharmaceuticals. 

The Ministry of Investment, Trade & Industry (MITI) of Malaysia noted that the US tariffs affect many countries with potentially significant implications for global trade and growth. 

The National Geoeconomic Command Centre (NGCC), recently approved by the Cabinet, will assess the impact of the US announcement and explore a comprehensive, multi-pronged strategy to mitigate the effects of these tariffs on the economy and industries. The NGCC’s key focus is to ensure the Malaysian economy remains competitive amidst these volatile times. 

According to the US Bureau of Economic Analysis, Malaysia ranks 15th on the US list with a trade surplus of US$24.8bil in 2024. Although the US has a trade deficit in goods with Malaysia, it enjoys a surplus in services, showing strong economic ties that benefit both countries by supporting jobs and growth. This deficit is also partly due to many US companies that have operated in Malaysia for decades, drawn by the country’s strong industrial ecosystem, especially in the E&E sector. 

To mitigate tariff impact, Malaysia is expanding export markets by prioritising high-growth regions and leveraging existing Free Trade Agreements (FTAs) including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP). Malaysia will also foster new partnerships within Asean and enhance Malaysia’s supply chain resilience by accelerating the implementation of key industrial policies like the New Industrial Master Plan 2030 (NIMP 2030) and the National Energy Transition Roadmap (NETR). 

A university undergraduate in international trade and finance will have more to say about Trump’s tariff strategy. If you have some inkling of economic history, tariffs contract trade and drives economies including the U.S. into a recession, if not a depression. But Trump’s advisors are adamant otherwise. Some fools never learn (I presume that’s why they remain fools!) 

References:

Malaysia hit with 24% reciprocal tariff by the US, FMT Reporters, FreeMalaysiaToday,
3 Apr 2025 

Malaysia rules out retaliatory tariffs, explores measures to mitigate export impact, Bernama, 3 April 2025

Let’s Label

 

An honest witness tells the truth;
a false witness tells lies.
Some people make cutting remarks,
but the words of the wise bring healing.
Truthful words stand the test of time,
but lies are soon exposed. (Proverbs 12:17–19)

Let's Label. That's a favourite game among many including some Christians. The rules are easy to remember. Any number can play. But it's especially appealing to those who are given to oversimplification. Name-droppers thrive on this game. And it helps if you speak with a measure of authority . . . looking somewhat pious and pronouncing your words very distinctly, very dogmatically. You'll gain stature in the group if you look down and frown a little as you affix the label to the person in question.

Source: https://www.linkedin.com

 

Labels vary. There are "temperament" labels. "She's a choleric, poor thing . . . married to a melancholic!"

These are akin to "emotional" labels. "Well, you know her—she's nervous" . . . or "He's a classic neurotic, a perfectionist to the core."

Of course, "doctrinal" labels are most popular among evangelicals. One guy is tagged a liberal, another neo-evangelical . . . and still others conservative—with a host of in-between shades.

To be completely honest, it is occasionally helpful to lick a label and stick it on. It saves a bundle of time, and it can communicate a fairly clear mental picture. However—it is important that we guard against using a wrong label, thus damaging that individual's true image or position in others' eyes. That is the main danger in playing Let's Label. It often means you set yourself up as judge and jury, declaring information that is exaggerated or thirdhand or just plain untrue. When that happens, we have stopped playing a game and started to slander.

Being alert and discerning, basing one's opinion on the absolute truth, is a sign of maturity, a mark of excellence in a life. But pasting labels on with only partial facts, feelings, and opinions to back those statements up is worse than unfair . . . it is being jury and judge!

The game needs another name . . . like, Let's Judge. (This is adapted from Pr. Chuck Swindoll’s article on “Labels”)

 

Reference:

Labels by Pastor Chuck Swindoll

US$565mil Withdrawn from Asian Markets (from 17 March)

Foreign investors remained net sellers across eight Asian markets, with total outflows reaching US$564.9 million (RM2.505 billion) for the week beginning 17 March 2025. According to MIDF Amanah Investment Bank Bhd’s fund flow report, titled “From Growth to Gridlock”, South Korea led the region with a net inflow of US$1.68 billion (RM7.45 billion) marking a sharp reversal after nine consecutive weeks of outflows. 

The only countries that recorded net foreign inflows were South Korea and the Philippines, while other regional markets continued to experience outflows. The Philippines recorded a net inflow of US$40.1 million (RM177.83) for the third consecutive week, following its securities regulator’s signal of openness to reducing the 20% minimum public float requirement for initial public offerings, potentially attracting more listings.

 

Source: https://ms.wikipedia.org 

Conversely, Indonesia registered its ninth consecutive week of foreign outflows, amounting to US$432.1 million (RM1.916 billion) amid economic and trade fluctuations. 

In Malaysia, the plantation sector recorded net foreign inflows of RM2.4 million, while foreign investors extended their selling streak on Bursa Malaysia for the 22nd consecutive week, with a net outflow of RM1.25 billion. MIDF said the net selling value declined slightly from RM1.34 billion in the previous week. 

In contrast, local institutions continued to support the market, marking their 22nd consecutive week of net buying, with an inflow of RM1.23 billion. The financial services sector recorded the highest net foreign outflow at RM609.7 million, followed by industrial products and services (-RM167.9 million) and consumer products and services (-RM148.4 million). Local retail investors extended their net buying streak for a sixth straight week, recording an inflow of RM25.5 million. 

Meanwhile, the average daily trading volume declined across most segments except for foreign investors. Local institutions and retail investors saw declines of 11.9% and 14.8%, respectively, while foreign investors recorded an increase of 27.4%. 

The level of volatility has to do with perception of Trump’s tariffs. Many are not clear where this leads to and hence withdrawals to safe havens. The impact of tariffs will vary for different countries and according to their openness. Trump’s advisors like Peter Navarro are either naïve or downright dumb. Most probably, more of the latter! 

Reference:

Foreign investors pull US$565mil from Asian markets, FMT/Bernama, 24 Mar 2025

 

Selamat Hari Raya Aidilfitri!

 

Ban Hospital IPOs?

Malaysia’s medical cost inflation of 12.6% in 2023 is significantly higher than the global average of 5.6%. However, banning private hospitals from going public may not be the solution to rising medical costs. This idea was mooted by Bayan Baru Member of Parliament Sim Tze Tzin, who urged the government to prevent private hospitals from going public to curb profit-driven healthcare. He also suggested that Khazanah Nasional Bhd and the Employees Provident Fund consider delisting the private hospitals that they have stakes in, making them fully government-owned. 

Sim cited South Korea’s ban on hospital operators from undertaking initial public offerings (IPOs) as an example, stating that hospitals should prioritise saving lives rather than pursuing higher profits. Granted that South Korea’s ban on hospital operators going public has allowed its citizens access to high-quality healthcare services and low insurance premiums. But the country has its own set of problems too, primarily low reimbursements that make many hospitals financially inoperable.

 Source: https://en.wikipedia.org

 

In Malaysia, many Bursa Malaysia-listed healthcare providers are raking in record profits, leading to increased scrutiny over rising medical costs. For instance, shares of KPJ Healthcare Bhd recently hit an all-time high after posting record profits in financial year 2024 and rewarding shareholders with a special dividend. In contrast, IHH Healthcare Bhd saw a decline in its full-year results, dragged by foreign-exchange losses, higher staff costs and increased depreciation charges. Regardless of their financial conditions, it may not be wise to penalise hospitals for doing well.

 

No hospital, whether public-listed or privately held, would provide healthcare services without profitability driving it. Only government hospitals can do so, but they are unable to cope. Doctors and nurses at public hospitals are reportedly overworked and underpaid, often turning to private hospitals for better pay.

 

The government should consider building more hospitals and raising the wages of medical practitioners. But where will the money come from, as this can further strain the country’s finances? It can do a private-public partnership and set a new network of hospitals that are between public and fully private, a modified UMSC model.

 

Like education, medical care is a basic necessity provided by the government. Ideally, these social services should not be privatised. But for efficiency, ingenuity, innovation, private sector participation is helpful. Getting the balance right is the key.

 

Reference:

Banning hospital IPOs won’t curb rising costs, The Star, 8 Mar 2025

Keeping Confidences

 \Can you keep a secret? Be honest, now. When privileged information passes through one of the gates of your senses, does it remain within the walls of your mind? Or is it only a matter of time before a leak occurs? When the grapevine requests your attention from time to time, do you refuse to help it climb higher, or do you encourage its rapid growth, fertilizing it by your tongue? When someone says, "Now this is confidential," do you respect their trust or ignore it . . . either instantly or ultimately? 

Source: https://commons.wikimedia.org

The longer we live, the more we realize the scarcity of people who can be fully trusted with confidential information. The longer we live, the more we value those rare souls who fall into that category! As a matter of fact, if we were asked to list the essential characteristics that should be found in any member of a staff or officer . . . the ability to maintain confidences would rank very near the top. No leader deserves the respect of the people if he or she cannot restrain information that is shared in private. 

Our minds might be compared to a cemetery, filled with graves that refuse to be opened. The information, no matter how juicy or dry, must rest in peace in its coffin, sealed in silence beneath the epitaph "Shared in confidence—Kept in confidence." 

No business ever grows and remains strong unless those in leadership are people of confidence. No school maintains public respect without an administration and faculty committed to the mutual guarding of one another's worlds. When leaks occur, it is often a sign of character weakness, and action is usually taken to discover the person who has allowed his or her mental coffin to be exhumed and examined. 

Information is powerful. The person who receives it and dispenses it bit by bit often does it so that others might be impressed because he or she is "in the know." Few things are more satisfying to the old ego than having others stare wide-eyed, drop open the jaw, and say, "My, I didn't know that!" or "Why, that's hard to believe!" or "How in the world did you find that out?" 

From now on, let's establish four practical ground rules as Ps. Charles Swindoll says:

 

1.     Whatever you're told in confidence, do not repeat.

2.     Whenever you're tempted to talk, do not yield.

3.     Whenever you're discussing people, do not gossip.

4.     However you're prone to disagree, do not slander. 

Honestly now, can you keep a secret?

 

Reference:

Excerpt taken from Come before Winter and Share My Hope by Charles R. Swindoll.

Feb 2025 Palm Oil Stock Falls by 4.3%!

Palm oil stock level fell for the fifth consecutive month, by -4.3% month-on-month (MoM) to 1.51 mil tonnes in Feb-25, as weaker exports were more than offset by lower imports and output, as well as higher domestic consumption.  

Palm oil production remained on downtrend, falling by -4.2% MoM to 1.19 mil tonnes in Feb-25, as seasonally low cropping pattern was exacerbated by excessive rain. Exports fell further, by -16.3% MoM to 1.0 mil tonnes in Feb-25, due to demand rationing, palm’s weak price competitiveness against other competing oils, and seasonality, in our opinion. This is according to a Hong Leong Investment Bank (“HLIB”) report. 

Cargo surveyor Intertek Services indicated that palm oil shipment from Malaysia fell -12.0% MoM to 141k tonnes during the first 5 days of Mar-25, dragged mainly by lower shipments to Africa, India and Middle East.

 

The downtrend in palm oil stock level will likely persist into Mar-25, mainly on the back of less favourable weather conditions, which will likely suppress palm production further. 

Demand rationing, on the other hand, will likely persist into Mar-25. This will cap restocking activities. YTD, CPO price averaged at RM4,709 per mt. 

 

Crude palm oil (CPO) price will remain at elevated level in the near term, and CPO price strength to dissipate post quarter one 2025. That’s according to HLB Research. 

HLIB is keeping their 2025-26 CPO price assumptions of RM4,000 per mt and RM3,800 per mt unchanged. Costs can be improved with automation and innovation. Large oil palm companies must take the lead! That will also reduce foreign labour force. 

Reference:

Feb 2025 palm oil stock falls 4.3% amid weaker exports, higher consumption, CS Ming, Focus Malaysia, 11 March 2025