How may Donald Trump’s 2024 victory impact Malaysia?

The re-election of Donald Trump in 2024 as US president has introduced a wave of uncertainty and potential shifts for global markets, including Malaysia’s.

Trump's policies on trade, energy, and currency are likely to create ripple effects that Malaysian investors, businesses, and policymakers will need to navigate. 

Should we congratulate Donald Trump? Hmmmm...

Nvm lah... It's a reality now... Here are some major highlights:

• First, the return to Trump’s protectionist trade policies could impact Malaysia's export-driven economy. If Trump re-instates tariffs or tightened trade policies with Asian economies, Malaysia, as a significant exporter to the U.S., may see fluctuations in demand for its electronics, palm oil, and rubber products.
  
  
  If this really happened, Malaysian companies exporting to the U.S. could face increased costs, making their products less competitive unless they find ways to absorb or offset the tariffs.
  
  
• The stronger U.S. dollar was expected under Trump’s administration and this would definitely presents another challenge.
  
  
  Historically, Trump’s policies have led to a stronger dollar as the U.S. emphasized domestic production. For Malaysia, a strong dollar could increase the costs of imports, especially for essential commodities like oil and machinery, and exacerbate Malaysia’s debt repayments on USD-denominated loans (if any).
  
  

  

  
  
  
  
  
  
  The Malaysian ringgit may face additional pressure, which could lead Bank Negara Malaysia to carefully monitor exchange rate policies to stabilize the local currency.
  
  
• Energy policies will also play a crucial role. Trump’s support for fossil fuels (traditional energy) and potential rollback on renewable energy initiatives might boost oil and gas production in the U.S., leading to lower global oil prices.
  
  
  This could have a mixed impact on Malaysia’s oil and gas industry, which is a major revenue generator for the nation.
  
  
  While lower oil prices may benefit Malaysian consumers in the form of lower energy costs, they could dampen revenues for companies like Petronas, Malaysia’s national oil corporation, potentially impacting national GDP.

• Finally, Malaysian tech and semiconductor sectors may experience volatility, especially if Trump increases scrutiny on Chinese tech giants or implements policies targeting tech supply chains.
  
  
  As Malaysia is a key player in the semiconductor industry, any tensions in U.S.-China tech relations could disrupt supply chains, affecting Malaysian tech exports and local job markets tied to this sector.

In conclusion, while Trump’s victory presents both risks and opportunities, Malaysia’s financial landscape is likely to see heightened volatility and shifting trade and investment dynamics.

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