US manufacturers in Malaysia cut China imports, boost local sourcing after tariffs
American firms operating in Malaysia have lowered their reliance on Chinese inputs and increased purchases from Malaysia following the introduction of US tariffs.
The American Malaysian Chamber of Commerce reported that US manufacturers in Malaysia are shifting away from Chinese components after recent US tariff measures. According to CEO Datuk Siobhan Das, 43% of surveyed firms cut their dependence on China, and no company reported an increase. About 36% altered sourcing or production to satisfy rules-of-origin, and 34% expanded the proportion of inputs sourced locally.
While 86% claim their fundamental business strategies have not shifted dramatically, they have modified sourcing, pricing and production tactics. The survey also noted a total project cost of RM42.86 billion for 2024-2025, a rise of roughly 51% from the previous survey, reflecting strong long-term confidence in Malaysia. Additionally, MIDA CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid highlighted talent as both a strength and a challenge, citing shortages in advanced engineering and digital skills.
