US tariff hike on Malaysian goods sparks trade concerns, Port Klang sees limited impact

By Admin

11 Aug, 2025

The recent decision by the United States to impose a 19% tariff on Malaysian goods   significantly higher than the 10% rate for Singapore   has raised concerns among exporters and logistics players. Industry stakeholders warn that the steeper tariff could increase export costs and slow certain commodity movements through Malaysia’s trade routes.

Impact on Exporters and Trade Volumes
According to Port Klang Authority general manager Captain K. Subramaniam, the higher tariff may place added cost pressures on exporters and potentially reduce US-bound cargo volumes routed via Malaysia. However, he stressed that the overall effect on Port Klang’s competitiveness will remain limited, as the port operates primarily as a transshipment and regional hub rather than relying heavily on direct US-bound exports.

Strengths Keeping Port Klang Competitive
Subramaniam highlighted that Port Klang continues to benefit from strong intra-Asia trade and robust shipping connectivity. The port’s strategic location, cost-efficiency, growing terminal capacity, and comprehensive logistics support remain its core competitive advantages. Ongoing developments such as Westports 2 and the planned Carey Island Port will further boost capacity and improve turnaround times, while enhanced digitalisation and competitive logistics services aim to retain and grow transshipment volumes.

Concerns Over Regional Competition
Despite Port Klang’s resilience, Federation of Malaysian Freight Forwarders president Datuk Dr Tony Chia Han Teun cautioned that the tariff differential could divert high-value transshipment and direct export volumes to Singapore, affecting Malaysia’s wider logistics ecosystem. He urged dialogue with US counterparts and called for cost-cutting measures, improved port efficiency, and greater use of free trade agreements to offset the impact.

Government Perspective
On the policy front, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz described the 19% tariff as “reasonable” and not a threat to Malaysia’s competitiveness, although he acknowledged industry hopes for a lower rate.

While the tariff hike presents challenges for certain exporters, Malaysia’s strategic port infrastructure, trade connectivity, and ongoing investments suggest that Port Klang’s role as a leading regional maritime hub will remain largely intact.