Trump’s Tariffs and the 90-Day Pause: What It Means for Malaysian Business Owners in 2025

Published: 22 Apr 2025

In April 2025, U.S. President Donald Trump disrupted global trade by announcing steep tariffs—taxes on imported goods—targeting countries worldwide, including Malaysia. A 24% tariff on Malaysian exports to the U.S. was set to take effect, but on April 9, Trump paused these tariffs (except for China’s 145%) for 90 days, starting April 9, 2025. This temporary reprieve has Malaysian business owners rushing to adapt amid uncertainty. This article covers the 90-day pause, its implications for Malaysian businesses, and strategies for small and medium-sized enterprises (SMEs) to thrive in these challenging times.

What’s the Deal with the Tariffs and the 90-Day Pause?

On April 2, 2025, Trump declared “Liberation Day,” introducing a 10% tariff on all countries’ imports to the U.S., effective April 5, and higher “reciprocal” tariffs for specific nations. Malaysia faced a 24% tariff, starting April 9, because Trump claimed Malaysia imposes 47% tariffs on U.S. goods (though local experts say Malaysia’s actual average tariff is about 5.6%). These tariffs make Malaysian goods more expensive in the U.S.

On April 9, Trump paused the higher tariffs (except China’s) for 90 days, delaying their potential start to early July 2025. During this period, only the 10% baseline tariff applies. The pause allows countries like Malaysia to negotiate better trade terms or adjust strategies. Malaysia’s Trade Minister, Tengku Zafrul Aziz, described the situation as “fluid and uncertain,” with the government using this window to push for lower tariffs or broader exemptions, such as those for semiconductors. A Malaysian delegation is set to visit Washington by late April to advocate for better terms.

With Trump in Place, It’s No Longer Business as Usual

With Trump’s unpredictable trade policies, it’s no longer business as usual (BAU) for Malaysian business owners. The 90-day pause offers a brief respite, but the looming threat of higher tariffs signals that SMEs are living in extreme times. The global trade landscape is volatile, with the 10% tariff already raising costs and the potential 24% tariff threatening jobs and profits. The Malaysian Industrial Chamber of Commerce and Industry (MICCI) warns of up to 50,000 job losses if higher tariffs return, particularly in industrial hubs like Penang, Johor, and the Klang Valley. A weakening ringgit, driven by global trade slowdowns, could also inflate costs for imported goods like fuel and raw materials, squeezing SMEs further.

This isn’t just a bump in the road—it’s a wake-up call. SMEs must adapt to survive and thrive in this high-stakes environment. So, what do SME business owners need to do to navigate these turbulent times?

Key Strategies for SME Business Owners

To weather this storm, Malaysian SMEs must act strategically and decisively. Here are two critical steps to start with, followed by practical actions:

1. Know Your Core Competency: Every SME must identify what makes it unique and competitive. Is it your product quality, fast delivery, or niche expertise? Understanding your core strength helps you focus on what sets you apart, whether you’re selling to the U.S. or new markets like South Africa. Double down on this competency to retain customers and attract new ones, even as tariffs raise costs.
2. Assess Your Company’s Strength: Take a hard look at your business’s financial and operational health. Can you absorb a 10% or 24% tariff without collapsing? Do you have cash reserves to weather a drop in U.S. orders? Are your supply chains reliable, or are you overly dependent on tariff-hit countries like China? Conduct a quick audit: check your profit margins, debt levels, and supplier contracts. A strong company can pivot to new markets or invest in efficiency, while a weaker one needs to cut costs fast.

Practical Actions for SMEs

Beyond these foundational steps, here are actionable moves SMEs can take during the 90-day pause:

• Maximize Exports Now: Use the pause to ship as much as possible to the U.S. while the tariff is only 10%. A rubber glove exporter, for example, could send extra stock to U.S. warehouses to secure sales before the 24% tariff potentially returns in July.
• Cut Costs Creatively: Look for ways to save without sacrificing quality. Switch to local materials—like Malaysian timber for furniture—or streamline operations to reduce waste. A small electronics firm might renegotiate supplier contracts to lower costs.
• Check Tariff Exemptions: Some products, like semiconductors and pharmaceuticals, are exempt from tariffs. Verify your product codes (HS codes) to see if you qualify. A Penang chip maker could save thousands by confirming its exemption status.
• Find New Markets: The pause is a chance to explore markets beyond the U.S. Government programs like the Market Development Grant can help. A glove maker could target Europe, where demand is growing, to offset U.S. risks.
• Tap Government Support: The Ministry of Investment, Trade, and Industry (MITI) offers grants, trade missions, and advice. Engage with MITI or the Malaysian Investment Development Authority (MIDA) to access resources. A small business could use export grants to break into Kenya or Poland.
• Build Resilience: Invest in what makes you competitive, like technology or staff training. A furniture SME could upgrade to automated machinery to boost output, making it easier to compete despite tariffs.

Wrapping Up

For Malaysian SME owners, Trump’s tariffs and the 90-day pause mark the end of business as usual. These are extreme times, demanding bold moves. By knowing their core strengths, assessing their resilience, and acting fast—whether by shipping goods, cutting costs, or finding new markets—SMEs can turn challenges into opportunities. Malaysian SMEs can navigate this wild ride and emerge stronger with smart strategies and government support.

Source

• Trump's tariff: Pause gives Malaysia welcome relief, says Anwar
• Trump announces 90-day pause on ‘reciprocal’ tariffs with exception of China