Semiconductor chips placed on a circuit board, captured by Reuters
Malaysia has warned that any U.S. tariffs targeting BRICS countries over their efforts to move away from the U.S. dollar could destabilize the global semiconductor supply chain. Trade Minister Tengku Zafrul Aziz expressed concern after President-elect Donald Trump proposed a 100% tariff on BRICS nations unless they refrained from creating an alternative to the dollar.
The BRICS bloc, originally comprising Brazil, Russia, India, and China, has since expanded to include other nations. While Malaysia has applied to join this group seeking to reshape global economic dynamics, it has not yet been officially admitted.
The U.S. remains a critical trade partner for Malaysia, being its third-largest market. Additionally, American companies play a key role in Malaysia’s thriving semiconductor industry. This Southeast Asian nation is a significant player in the global tech supply chain, contributing about 13% of the world’s chip testing and packaging operations.
Minister Zafrul emphasized the mutual reliance between Malaysia and the U.S. in ensuring the stability of semiconductor production. Imposing heavy tariffs, he cautioned, could harm both nations, leading to potential disruptions in an already strained global supply chain.
He clarified that while BRICS members have occasionally discussed reducing their dependence on the U.S. dollar, no formal decision has been made. However, the momentum for alternatives has increased following Western sanctions on Russia due to its conflict in Ukraine.
Russia recently stated that pressuring nations to stick to the dollar could backfire on the U.S., possibly accelerating the push for national currencies in global trade.
The semiconductor industry’s interconnected nature underscores the risk of such unilateral moves. If major economies in the BRICS bloc, including potential members like Malaysia, face punitive tariffs, the repercussions could ripple across tech industries worldwide, affecting products ranging from smartphones to vehicles.
Malaysia’s proactive monitoring of the situation highlights its commitment to balancing national interests while maintaining vital global trade relationships.
