US Tariffs Impact on Malaysian Businesses

On April 11, we hosted a special edition of Tribal Monthly, gathering a mix of entrepreneurs, policy advisors, tech operators, investors, and academics to talk about one of the most urgent topics this quarter: US tariffs.

There’s been no shortage of coverage—headlines, speculation, political takes—but very few sessions have given Malaysian business owners a space to actually talk through what it means for their operations, their supply chains, and their planning. This was one of them.

At the center of it was Chua Seng Boon, head of investments with years of experience. He’s been through more than a few global shakeups, and he came armed with charts, real data, and policy breakdowns that made the recent announcements feel a lot more tangible.

Rather than focusing on theory, Chua focused on consequences: who gets hurt, who benefits, and which markets are shifting under the radar.

What’s driving these tariffs?

Chua opened with the real motivation behind the latest tariff escalation—it’s not just about trade. The US is ramping up its domestic manufacturing, especially in areas tied to defense and infrastructure. This includes rare earth materials, semiconductors, electric vehicle components, and high-end electronics. China currently dominates many of those segments, so the tariff strategy is more about reducing dependence than it is about generating revenue.

This isn’t the first time tariffs have been used for leverage, but this round is different. There are security concerns wrapped into economic policies, and when you dig into the executive orders and legislation coming out of Washington, it becomes clear that this is a long game.

And it’s not just the US reacting—China has responded by tightening control over rare earth exports and certain categories of AI technology. That counter-response is already creating shockwaves across supply chains that Malaysia is part of.

Malaysia is feeling it—but not evenly

The discussion shifted to the local scene quickly. One by one, participants shared what they were seeing. A few said things had gone quiet—projects postponed, negotiations slowed. Others said they were being asked for new solutions altogether.

One tech leasing company reported a spike in interest. As prices rise on new equipment, companies are holding off on upgrades and turning to leasing and refurbished units instead. That’s a win for them, and they’re expecting more demand in the months ahead.

In the cloud and hosting space, we heard about Chinese companies moving their Asia operations to Malaysia. They’re not pulling out of China entirely, but they are creating buffers—setting up parallel systems to manage risk. That’s good news for data center providers here, and it signals a broader trend: companies are actively diversifying locations, not just suppliers.

For those in manufacturing or hardware distribution, the picture is tougher. Costs are up, negotiations take longer, and there's real uncertainty about how much more the tariffs will escalate. One participant said plainly, “We’ve already lost deals this year because the margins just don’t work anymore.”

Not everyone is looking West

One unexpected thread that kept coming up: Central Asia. Countries like Uzbekistan, Kazakhstan, and even parts of Eastern Europe are popping up in trade conversations again. Chua shared that Uzbekistan’s government has been quietly building a strong tech development agenda. They’ve created tech parks, launched startup incentives, and reached out to external advisors—Chua being one of them.

There’s still a long way to go, but it’s an example of how newer markets are stepping up while others are bogged down in politics.

Closer to home, ASEAN markets like Indonesia and Vietnam remain on the radar. Many participants agreed that diversifying customer bases and partners into this region is now less of an option and more of a necessity. Not because ASEAN is perfect—but because it’s at least relatively stable, growing, and accessible.

What about Malaysia’s position?

This topic naturally came up during the session. Many in the room acknowledged that, in a climate shaped by fast-moving global trade decisions, clarity and coordination become even more valuable for businesses trying to plan ahead.

There was a shared sentiment that greater visibility into Malaysia’s positioning—whether in relation to the US, China, or regional trade alliances—would help companies make more confident and aligned decisions. With supply chains shifting and investment patterns changing, having clear signals at the national level could strengthen how Malaysian businesses respond and compete.

Some participants expressed hope that more structured support and communication would follow as the situation evolves. Others suggested the importance of leveraging industry voices and experienced trade negotiators to ensure Malaysia’s interests are effectively represented in international discussions.

This wasn’t a call-out—it was a call for collaboration. Business owners are ready to adapt and move, and many are looking for ways to do so in step with national direction and long-term policy thinking.

AI, cybersecurity, and supply chain tech aren’t immune either

Tariffs aren’t only about goods. The conversation expanded into digital infrastructure and AI tools—areas that don’t often make it into trade policy headlines but are very much affected.

As companies increasingly rely on AI for automation, document processing, and customer interaction, they’re also uploading massive volumes of data into tools they don’t control. Several leaders in the room expressed concerns about data privacy, ownership, and long-term risks.

One example came from a firm that recently blocked a wave of suspicious server traffic—coming from foreign locations—targeting their site. The attacks were filtered by their AI firewall, but the team traced the pattern back to automated bot networks likely tied to commercial espionage. It was a reminder that in a high-stakes trade environment, information is as valuable as products.

So where do we go from here?

No one left the session with a fixed plan, but everyone left thinking differently. Some wrote down new markets to explore. Others noted key tariff categories to avoid. A few said they were going to revisit their entire supply chain to see where the gaps are.

Here are a few themes that stuck with us:

• Keep moving: Sitting still and waiting for clarity may not be viable anymore. Small, calculated moves matter—whether that’s testing a new market, trialing new tech, or building fresh partnerships.

• Be cautious about over-exposure: If your business is too reliant on one region—especially the US or China—it’s time to revisit that setup.

• Don’t underestimate regions you’ve never explored: Central Asia and Africa came up more than once as growth spots. Not easy, but not impossible either.

• Digital tools need protection, not just productivity: It’s great to adopt AI tools—but the trade-off in data security and infrastructure ownership can no longer be ignored.

This was one of the most candid Tribal Monthly sessions we’ve had. There was no fluff. No posturing. Just real business owners talking to each other about what’s actually happening and what they’re doing about it.

If you missed it, stay tuned. More sessions are coming, and we’ll keep making space for these conversations—because they’re only getting more relevant.

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