US Tier 2 illegal transshipment risk classification threatens Malaysia with higher compliance costs
KUALA LUMPUR: Malaysia could face higher compliance costs and tighter customs scrutiny after the United States classified the country as a Tier 2 risk for illegal transshipment involving China-linked goods, economists said.
KUALA LUMPUR: Malaysia may experience higher compliance costs and stricter customs checks as the United States has classified the country as a Tier 2 risk for illegal transshipment involving China-linked goods, according to economists. This classification, which includes Malaysia alongside Brazil, Indonesia, Thailand, Turkey, and Vietnam, could impact investor sentiment and disrupt supply chains, particularly for industries reliant on exports to the US.
Malaysia's economic analyst, Dr Aimi Zulhazmi Abdul Rashid, predicts immediate risks such as increased documentation requirements, supply chain diversion, and reputational damage, rather than immediate tariffs. Industries like electrical and electronics, furniture, solar products, and rubber gloves, which have significant export ties to the US, are particularly vulnerable.
The US identified Malaysia among over 40 countries at risk of facilitating tariff evasion through China-linked transshipment networks. The government's response should include visible enforcement measures, stronger digital certificates of origin, and mandatory origin audits for goods destined for the US.
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