Malaysia Prepares for Potential US Tariffs by Strengthening Trade Ties with Other Nations: Anwar

KUALA LUMPUR – Malaysia remains uncertain whether its partnership with BRICS – a growing economic alliance – will negatively impact its trade relations with the US, following warnings from President Donald Trump that any attempt by BRICS member countries to replace the US dollar as the reserve currency will result in a 100 percent tariff.

Prime Minister Anwar Ibrahim told Parliament on February 4 that the Cabinet is preparing for all possibilities in light of the decisions made by the Trump administration amidst geopolitical uncertainty.

“We cannot rush into decisions. We are still uncertain about the impact on the country. Therefore, we need to be prepared at the Cabinet level and through several special committees to face any eventuality. Our participation in BRICS is still in the early stages,” said Datuk Seri Anwar.

BRICS, originally composed of Brazil, Russia, India, China, and South Africa, has been discussing the establishment of a new reserve currency. The group has expanded to include Indonesia, Egypt, Ethiopia, Iran, and the United Arab Emirates.

Malaysia is one of the nine BRICS partner countries, but not a full member.

At the BRICS 2024 Summit held in Russia in October, attended by partner countries, the 10-member bloc discussed the possibility of creating a gold-backed currency as an alternative to the US dollar.

On January 31, Trump reiterated his threat to BRICS member countries, imposing a 100 percent tariff should they pursue de-dollarization.

“We will demand a commitment from these seemingly hostile nations that they will not create a new BRICS currency or support any other currency to replace the dominant US dollar, or they will face a 100 percent tariff,” Trump stated via his Truth Social platform, echoing a similar statement made in November 2024.

However, the Kremlin rejected the threat, stating that no such plans exist. Kremlin spokesman Dmitry Peskov emphasized that BRICS is not discussing the creation of its own currency, but rather developing a joint investment platform for third-party countries.

In response to a question from Bagan Member of Parliament Lim Guan Eng regarding the potential impact of US tariffs on Malaysia, Anwar stated that the government is still negotiating with the US, but Malaysia cannot afford to adopt a wait-and-see approach.

Instead, Prime Minister Anwar stated that Malaysia must continue to diversify its exports and avoid relying on just a few trading partners. As such, Malaysia will actively build trade relations with other countries such as China, Russia, and Brazil.

“For our part, we must take proactive steps… to open up a wider network of trading partners,” he said.

Anwar also noted that the US market accounts for about 11 percent of Malaysia’s exports. According to the World Bank, in 2022, Malaysia’s exports to China accounted for nearly 14 percent of its total exports.

China is Malaysia’s second-largest trading partner after Singapore, followed by the US in third place, while Russia and Brazil are not major trading partners.