The recent announcement by the United States to impose import tariffs of up to 19% on Malaysian export products has placed increasing pressure on local small and medium enterprises (SMEs). As a key pillar of the national economy, SMEs have made significant contributions to export-oriented industries. Without timely and effective support, Malaysia’s overall trade performance and employment stability may be negatively affected.

MCA Economic and SMEs Affairs Committee calls for the government to consider introducing a special two-year support scheme specifically aimed at assisting local SMEs that export to the US market. Such a policy would serve both as a short-term buffer and a transitional strategy to guide long-term market transformation.

Furthermore, we propose the implementation of the following key measures to be included in this special support package:

1. Export Tax Rebate Mechanism — To effectively reduce the cost burden on exporting businesses.

2. Low-interest Financing and Credit Guarantees — To help alleviate the cash flow pressures faced by SMEs.

3. Subsidies for Exploring New Markets — To encourage expansion into emerging markets such as South America, ASEAN, the Middle East, and Africa.

4. Support for Technological Transformation and Brand Development — To enhance product competitiveness and reduce reliance on a single export market.

This issue goes beyond economics. It is a matter of national strategic importance. Continued dependence on a single export destination leaves Malaysia’s trade position vulnerable to geopolitical tensions, foreign policy shifts, and global economic volatility. Now is a critical moment to realign the country’s foreign trade strategy.

SMEs should not be seen as a burden, but recognised as one of the most active and important drivers of the national economy. With firm and forward-thinking policies, the government can help strengthen business confidence and build a more resilient and competitive export sector.

This proposed two-year support plan should be part of a broader national export strategy, in line with medium- and long-term goals such as upgrading industries and diversifying Malaysia’s export markets.

We also propose the establishment of a Special Task Force on Export Transformation, with the aim of developing clear implementation frameworks and ensuring effective policy delivery. It is recommended that the Ministry of Investment, Trade and Industry (MITI) take the lead in forming this task force, comprising representatives from the government, business chambers, and the private sector, to ensure that support measures are accurately targeted and efficiently carried out.

Datuk Ir. Lawrence Low
MCA Economic and SMEs Affairs Committee Chairman
MCA Vice President

3 August 2025

-MCA Comm-