Malaysia Suffers In Trade War between the US and China

The trade war between the United States and China continues to be a growing influence in the economic strategy and work for Asian markets.

The US-China trade war began with the US imposition of tariffs on Chinese goods worth an estimated 300 billion dollars. The move came as a result of the US President, Donald Trump’s attempt at rejuvenating the local US economy.

China, in turn, has placed tariffs on US goods and heightened tensions between the two states have been the subject of much controversy during the past G20 summit in June 2019.

The flight of US manufacturing in China has led to much speculation and a smattering of Asian countries have been hailed as the next global manufacturing markets, including Vietnamese markets.

While the flight of US manufacturers from China has led to rising opportunities for some ASEAN markets, the overwhelming economic impact of the US and China trade war has led to some issues for world economies.

Although a 90-day tariff and trade war ceasefire has been recently negotiated between the two countries, the impact of their initial trade uncertainties and policies have far-reaching consequences.

Reuters has reported that Malaysian trade and economic goals are the latest victims in the economic tussle between the world’s superpowers. Malaysian finance gurus and the Malaysian government are speculating that the 2020 economic goals for reducing Malaysian fiscal deficit will be hard to meet as a result of the rising overall costs in trade markets globally.

The Malaysian finance minister had intended to set a target for a 3% fiscal deficit, a goal which has now been impacted by the uncertain economic atmosphere in the Southeast Asian region.

Other Asian markets have also suffered significant losses as a result of the rising tariffs.

Malaysia currently has a fiscal debt of 1 trillion ringgit due to political uncertainties, mismanagement, and corruption which the new government has been tackling head-on. A global market lapse has caused the third-largest economy in the Asian market to experience slow economic growth.

China and Malaysia have been negotiating policies, trade initiatives, and alternatives to help the two countries reach a mutually beneficial situation in the global trade war. The two large Asian markets have been in talks for the construction of a railway project that will cost several billion dollars.

If they can effectively negotiate the project, it might help Malaysia to recover from its economic slump and seek economic growth opportunities.