BUDGET 2026 AMID TRUMP TARIFFS
The tabling of Budget 2026 on Friday at 4pm comes amid tariffs imposed by US President Donald Trump aimed at addressing trade imbalances. Malaysia saw a reduced tariff rate of 19 per cent on its goods exported to the US, down from the 24 per cent that was first announced in April.
Anwar in April had considered the reciprocal tariffs by Trump as a “major threat” to the current global trade and investment system.
CNA reported earlier that businesses in the electronics and furniture sectors, which make up some of Malaysia’s biggest exports to the US, have expressed concerns over a potential “trade famine” that could force them to downsize or even shut operations.
Analysts believe the resulting economic slowdown caused by the tariff turbulence is expected to continue into next year.
Thus, the Malaysian government is likely to continue helping households and businesses to “adapt to or absorb the shock”, Stewart Nixon, who is deputy director of research at IDEAS, told CNA.
Agreeing, senior ASEAN economist at OCBC Lavanya Venkateswaran said that the bank expects there to be some form of “targeted support provided to small, medium enterprises that might be impacted by tariffs”.
Meanwhile, Dass from KSI opined that the “defensive and expansionary budget” is needed as the Southeast Asian country has to “spend big” to cushion the short-term pain from Trump’s tariffs that are “choking” exports, jobs and revenue.
According to the Malaysian International Chamber of Commerce and Industry (MICCI), Trump’s tariff shock could lead to as many as 50,000 direct and indirect job losses mainly affecting Penang, Johor and Klang Valley, reported local news outlet the New Straits Times in April.
Dass added that the budget set to be tabled by Anwar – who doubles as finance minister – needed to stimulate domestic demand to offset weaker exports and kickstart the 13th Malaysia Plan projects to anchor growth and re-position the country in new supply chains.
