Malaysia Warns China Against Using It to Avoid US Tariffs

As businesses worldwide brace for new U.S. tariffs with the incoming administration, Malaysia is telling Chinese companies not to use the country to try to evade duties.
“Over the past year or so … I have been advising many businesses from China not to invest in Malaysia if they were merely thinking of rebadging their products via Malaysia to avoid U.S. tariffs,” Malaysia’s deputy trade minister, Liew Chin Tong, told a forum on Nov. 2.
These tariffs have been extended to other countries that function as intermediaries for Chinese companies. The latest, on Nov. 29, affected Malaysia.
China, including its nearby export hubs, accounts for 80 percent of the world’s solar shipments, according to SPV Market Research.
Chinese solar companies have expanded across Southeast Asia, to countries on which the United States has not imposed trade tariffs, such as Laos and Indonesia.
Meanwhile, Chinese-owned companies are reducing their output in countries hit with tariffs.
“It’s a huge cat and mouse game,” said William A. Reinsch, a former trade official in the Clinton administration and senior adviser at the Center for Strategic and International Studies.
“It’s not that hard to move. You set up and you play the game again. The design of the rules is such that the U.S. is usually one step behind.”
Malaysia has also seen Chinese investment in other sectors such as semiconductor assembly, where Malaysia holds a 13 percent share of the global market.