Worried about Trump’s tariffs and how they could affect your investments?

US President Donald Trump has been wreaking havoc on stock markets around the world with his on-and-off tariffs this month. Malaysia, in particular, had been hit with a 24% tariff. While he has paused the tariffs for 90 days, many are still worried about the impact this will have on their investments.

In 2024, Malaysia exported a total of RM199 billion to the United States, which makes up about 13% of Malaysia’s total exports. If Trump’s tariffs are reimposed, some of the Malaysian sectors could see a really bad year. Here, we look at the 7 sectors that exports the most to the U.S. and would likely be the most impacted when the tariffs commence without change.

Methodology and Data

We will use data from the Observatory of Economic Complexity to examine Malaysian total exports to the U.S. The data is only available for 2023 and the sectors are chosen based on the highest exports to the U.S.

Furthermore, we know that it might not be easy to identify which Malaysian companies are in which sectors. This financial website actually has a good sector breakdown and we will use the classifications here.

#1: Electrical and Electronics

Electrical and electronics (E&E) sector is number one on the list. It exported a total of US$26 billion (RM117 billion) to the U.S. in 2023.

E&E companies in Malaysia produce and sells products such as

  1. Integrated circuits
  2. Semiconductor devices
  3. Broadcasting equipment
  4. Electrical transformers
  5. Electrical batteries

Based on data from Statista, the E&E industry generated sales of RM600 billion where most of it are exported to countries such as the U.S., China, Singapore and Hong Kong.

There is a silver lining: Semiconductors, which make up close to half of E&E exports to the U.S., have been exempted from tariffs. However, the 24% tariffs would still apply to the others.

To find out which stocks are listed under E&E, you can use the link here.

#2: Machinery, Mechanical Appliances and Parts

The mechanical machinery and parts sector come in second in this list. This sector exported about US$6.5 billion (RM29.3 billion) to the U.S. in 2023, which is about 19% of the total exports of this sector to the world.

This sector should not be confused with the E&E sector. It makes and sells machineries and mechanical appliances (complete with all the electrical and mechanical components assembled inside) and spare parts. They include:

  1. Office machine parts
  2. Computers
  3. Industrial printers
  4. Gas turbines
  5. Air conditioners and pumps

The U.S. is the biggest export contributor followed by Singapore (US$5.6 billion) and China (US$4.7 billion). So, companies could be losing a large chunk of its main source of revenue if the tariffs kick in.

You can browse which stocks are listed for the sector in the link here.

#3: Optical, Media, and Medical Equipment

Coming in at number 3 is the optical, media, and medical equipment sector. It exported about US$3.6 billion (RM16.2 billion) to the U.S. in 2023, and makes up about 23% of the sector’s total exports. Once again, the U.S. is the biggest client.

The sector exports the following major items:

  1. Oscilloscopes
  2. Medical instruments
  3. Orthopedic appliances
  4. Chemical analysis instruments
  5. Thermostats

Fun fact – Malaysia is the market leader in the oscilloscope industry, and it encompasses about 17% of the world’s exports. Who would have thought that?

There are three type of sectors that you can find the links here:

  1. Medical distributors: Medical instruments, orthopedic appliances
  2. Electronic equipment and instrument: Oscilloscopes
  3. Chemicals: Chemical analysis instruments, thermostats

#4: Furniture and Lights

The furniture and lights sectors come in at number 4. These sectors exported a total of US$1.6 billion (RM7.2 billion) to the U.S. in 2023, where it made up 10% of total exports. The U.S. was the sectors’ biggest client.

Malaysia companies are famous for their wooden furniture especially bedframes, table, kitchen cabinets and counters, and chairs. So, these furniture are high in demand from countries such as Singapore, Japan, Canada, and the United Kingdom.

You can find some of these companies under the home furnishing classification here.

#5: Rubber Products

The rubber sector comes in at number 5, as it exported a total of US$1.4 billion (RM1.6 billion) to the U.S. in 2023. And yes, the U.S. is their biggest client, buying up 23% of the sector’s total exports.

The biggest product is rubber gloves, when they gained popularity during the pandemic. This might be the time when you have heard of the infamous glove companies that were the craze of the stock market:

  1. Top Glove
  2. Supermax
  3. Hartalega
  4. Kossan Industries

To make things a bit easier, you can look for other rubber companies in the agricultural sector here.

#6: Metal

Coming in at number 6 is the metal sector. Exports to the U.S. totaled US$1.1 billion (RM5.0 billion) in 2023, and it encompasses 5% of total exports of the sector. The U.S. is the third biggest client after China and Singapore.

Metals here include:

  1. Aluminum
  2. Iron & Steel
  3. Copper
  4. Tin
  5. Zinc

Malaysia’s aluminum total exports actually ranked 11th in the world, and is primarily driven by Press Metal. Meanwhile, Malaysian iron & steel exports are ranked 24th in the world.

You can search for Malaysian metal companies in the non-energy sector here.

(Click to enlarge)

#7: Mineral Fuels (Petroleum)

Mineral fuels sector is at number 7 of the list. Most of the mineral fuels is petroleum. It exported around US$546 million (RM2.5 billion) to the U.S. in 2023 and only make up a very small share of Malaysia’s total petroleum exports.

Malaysia’s petroleum sector is big. So, it probably won’t be affected by much as it can just export to other countries such as China, Singapore, and Japan ( 3 biggest buyers of Malaysian petroleum).

To quickly search for these companies, you can look at the energy mineral sector here.

Conclusion

Investors hope for the best, but also prepare for the worst. We do not know whether Trump will make further changes to his tariffs when they are reimposed back again. But we can prepare by reviewing and evaluating our investment portfolio in preparation.

 

Let us know the comments below what you think of Trump tariffs!

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