KUALA LUMPUR: US President Donald Trump's tariffs shock could lead to as many as 50,000 direct and indirect job losses, primarily affecting Penang, Johor, and the Klang Valley, while also causing wage growth to stagnate, according to the Malaysian International Chamber of Commerce and Industry (MICCI).
Its president Christina Tee said the key risk sectors include electronics, gloves, and automotive parts, where export-linked production volumes may contract significantly, particularly impacting small and medium enterprises (SMEs).
"This is one of the most consequential trade developments in recent years. The 24 per cent tariffs will have far-reaching implications beyond the electronics manufacturing services (EMS) sector, affecting palm oil, medical devices, automotive parts, textiles and more.
"With over 65 per cent of our gross domestic product tied to trade, Malaysia's economy is extremely vulnerable to such shocks.
"These tariffs risk rendering our exports uncompetitive in the US, forcing businesses to reconsider contracts, restructure operations, or even shift production abroad," she said in a statement.
She emphasised that Malaysia cannot afford to remain passive while other regional economies actively seek relief or exemptions.
Tee said the country must respond promptly and work together to safeguard its industries, jobs and global competitiveness.
"To that end, MICCI has formally called for the establishment of a Tariff Mitigation Council, co-chaired by the Ministry of Investment, Trade and Industry and MICCI, to lead national-level coordination.
"The chamber also recommends the formation of bilateral working groups under the Malaysia–US Trade and Investment Framework Agreement as well as access to technical advisory services for affected exporters," MICCI said.
As part of its proposed five-point national response strategy, MICCI has outlined key measures such as a tariff cushioning scheme, trade agreement acceleration, an HS code defense taskforce, a US diplomacy taskforce, and an exporter resilience fund.
The chamber also called on employers to take proactive measures, such as reevaluating supply chains, exploring new markets, assessing trade documentation and compliance, and strengthening regional collaborations through Asean.