Like several other countries in the ASEAN region, Malaysia has begun to face the challenge of walking a tight rope between China and the US on the one hand and an even bigger challenge is dealing with the repercussions of the Trump administration’s economic policies.
For very long, the ASEAN nation has successfully managed robust economic relations with China and reasonably strong economic links with the US. The tensions between both countries — in recent years — have made this tougher and like other ASEAN nations, Malaysia is concerned over the impact of Beijing-Washington tensions on its economy.
US-Malaysia economic relations
The Malaysian PM, Anwar Ibrahim like leaders of other ASEAN nations, has been critical of isolationist economic policies of the US (Ibrahim also happens to be Malaysia’s Finance Minister). Malaysia currently happens to be the Chair of ASEAN (for the whole of 2025). Anwar Ibrahim while speaking at the opening of the ASEAN Foreign Minister’s conference last month said:
“Across the world, tools once used to generate growth are now wielded to pressure, isolate and contain. Tariffs, export restrictions, and investment barriers have now become the sharpened instruments of geopolitical rivalry”
The Malaysian PM was clearly alluding to the Trump administration’s inward-looking economic policies.
Earlier this month – on August 1, 2025 — the US announced a 19% tariff on Malaysian exports to the US (this was down from the earlier figure of 25%). The new tariff rates took effect on August 8, 2025. Certain commodities – pharmaceuticals and semiconductors – were exempt in the earlier tariffs announced in April and remain so currently. US President Donald Trump’s announcement that 100% duties would be imposed on semi-conductor chips not manufactured in the US has raised concerns in Malaysia, since this could have a significant impact on the latter’s economy. The US is an important market for Malaysia’s electronic exports . Semi-conductors account for over half of the ASEAN country’s electronic products exported to the US. Malaysia’s electrical and electronics sector (E and E) could be significantly impacted if Trump applies tariffs to Malaysia’s semi-conductor exports to the US.
Malaysia’s entry into BRICS
Given the economic challenges arising out of a changing global economic order, Malaysia has sought to re-reorient the country’s economic linkages – looking for new partners and to position itself as an important economic centre not just within ASEAN, but globally. The ASEAN nation’s entry into BRICS as a partner country needs to be viewed in this context (it has also applied for full membership of BRICS).
Another ASEAN country, Indonesia is a full member while apart from Malaysia two other ASEAN nations which are partner countries of BRICS are: Vietnam and Thailand.
While speaking at the BRICS Summit held at Rio De Janiero in July 2025, Anwar Ibrahim had said that BRICS:
“… must demand the transformation of global governance structures, from the United Nations to the World Trade Organisation, the International Monetary Fund and the World Bank towards a more democratic and just multilateral order,”
In doing so, Ibrahim echoed many other BRICS leaders. He also said that the BRICS could play an immense potential in giving a push to the ASEAN country’s economy. The Malaysian PM has also pitched for greater cooperation between ASEAN and BRICS
Significantly in 2024, over 1/3rd of Malaysia’s trade was with BRICS countries. Said Anwar Ibrahim, while commenting on the growing trade between Malaysia and BRICS countries:
“Although Malaysia is not yet a full member of BRICS, it is already benefiting from economic relations with the countries of the association, as most of them are trading partners and stable sources of foreign investment in Malaysia,” It is true that Malaysia could have been having strong trade relations with many BRICS members even before it entered BRICS. In terms of symbolism however, these figures are very important. Malaysia’s economic growth in the second quarter was 4.4% and was slower than the 4.5% estimate. Global economic turmoil is also likely to take its toll on the ASEAN economy. Thus, at a time when Malaysia is facing several economic challenges, the trade figures with BRICS countries would come as a boost and propel Malaysia towards further strengthening its economic relations with BRICS members and also become more pro-active in the BRICS grouping.
