Can Malaysia benefit from the resurgence of the Sino-US trade war?

Recently, the US imposed tariffs on China. Analysts believe that it indicates that the Sino-US trade war will continue, and that Malaysia will benefit from five major areas under its neutral advantage.

With the US announcing that it will impose tariffs on 18 billion US dollars of goods imported from China, Hong Leong Investment Bank research suggests that China's gloves, aluminum industry, industry, renewable energy, and technology are all potential beneficiaries.

The current US tariff measures against China cover products in strategic industries such as steel and aluminum, semiconductors, electric vehicles, batteries, key minerals, solar cells, shipyard cranes, and medical products.

According to research by Hong Leong Investment Bank, China's related fields will mainly benefit from trade transfers and increased foreign direct investment.

●Starting in 2026, the US will raise tariffs on medical and surgical gloves imported from China from 7.5% to 25%.

●This seems to be positive for China's glove makers, but I believe Chinese glove makers may lower pre-tax pricing to maintain competitiveness.

Until then, Chinese glove makers may gradually shift their focus to Europe and Asia, while US glove imports will shift to Malaysia.

●Starting this year, US tariffs on some steel and aluminum imports from China will be raised from 0 to 7.5% to 25%.

●We expect this development is unlikely to have a significant impact on the overall balance of supply and demand in the aluminum market. China is an aluminum importer, and the US can obtain it from other suppliers. Therefore, this has a neutral impact on the overall aluminum market and Qi Li.

●Qili has established stable business relationships with the European and Asian markets, accounting for about 90% of its revenue, while the American region only accounts for about 2%.

● Under the “China +1” strategy, Southeast Asian countries, including Malaysia, are potential destinations for +1, which should benefit participants in China's industrial industry.

●Tariffs on imported solar cells from China will be raised from 25% to 50% this year.

●According to Wood Mackenzie's estimate, the US imported less than 0.1% of Chinese solar modules in the late quarter of 2023, so the impact was minor.

●Starting in 2025, tariffs on semiconductors imported from China will increase from 25% to 50%.

●Looking back at 2018 to 2019, the first wave of tariffs led to the transfer of production capacity, outsourcing of manufacturing operations, and diversification of supply chain redundancy. Today, the latest tariffs should cause this trend to continue to accelerate. Despite this, China is still the largest consumer of semiconductors, buying more than 50% of the world's manufactured chips.