As trade tensions rise over alternative currencies and de-dollarisation efforts within the bloc, Malaysia warns US tariffs on BRICS could disrupt global semiconductor supply chains.
Last week, Malaysia expressed concern that any attempt by the incoming Trump administration to impose tariffs on BRICS countries for exploring alternative currencies or creating a new one could disrupt the global semiconductor supply chain.
The BRICS group, initially comprising Brazil, Russia, India, and China, has since expanded to include other nations. Malaysia has applied to join the BRICS bloc, which seeks to challenge the global order led by Western economies. However, it has not yet been officially accepted as a member.
According to a report by the Reuters, Malaysia’s Trade Minister, Tengku Zafrul Aziz, stated that the country is closely monitoring the situation, especially after US President-elect Donald Trump threatened 100% tariffs on BRICS nations unless they agreed not to create or support a currency alternative to the US dollar.
Zafrul further emphasised that the US is Malaysia’s third-largest trade partner, and American companies are key investors in the country’s semiconductor industry. Malaysia plays a critical role in the global semiconductor market, handling around 13% of global chip testing and packaging. He warned that imposing a 100% tariff would harm both nations, particularly given their interdependence in the global supply chain.
Although BRICS countries have discussed reducing their reliance on the US dollar for trade, no official decisions have been made regarding de-dollarisation. While the group does not currently have a common currency, discussions around this topic have intensified following Western sanctions imposed on Russia due to the war in Ukraine.
