Hui Jin

614b94cccfecf62e898f3c1a9e1ce4fc82f219abdb04ab0d73f2240175de6682

Money

Anwar

watches

HVGT

Finance Ministry

taxable goods

handbags

jewelry

tax policies

Every year, Malaysians eagerly await the unveiling of the nation's budget, and recently, on October 13, the Budget 2024 was officially presented at the Dewan Rakyat.
As we fast forward to November 1, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim has made a significant announcement. In a written response to Chong Zhemin (PH-Kampar), who inquired about the introduction of the High-Value Goods Tax (HVGT), Anwar declared that it would come into effect on May 1 of the following year. This move marks a significant step in the government's financial planning.
<img src="https://r2.myc.my/ab622fe8495eaa46a68fdfbafa43a667cdddc5f1cf310040be7db77389bd5aa5" />
With that being said, the Ministry of Finance is still in the finalizing phase in terms of the tax policy and the legal aspects of taxing high-value goods while replying to Zhemin on November 1. 
Details like implementation mechanism, types of goods applicable, and tax rates on high-value goods are yet to be disclosed since it is yet to be finalized and approved by the Cabinet. 
Additionally, Anwar said that inputs from various stakeholders have been taken into account through the engagement of the Finance Ministry and the Customs Department while drafting the tax policies and laws. 
Moreover, he also declared that the introduction of HVGT for luxury items like jewellery and watches would be made at the rate between 5% and 10% by the government while tabling the Budget 2024 on October 13. 
<img src="https://r2.myc.my/11636ab1b9cd4e1f329c13d6a0c0d67fbec907d1de0937906a24281aa45862f9" />
As such, several MPs would also like to know further about the characteristics of high-value goods tax, how it will be taxed, and if there is a list of goods and products shown on what is taxable. 
Despite this, the Finance Minister expressed that the purpose of introducing the tax was to increase the country&rsquo;s tax base by imposing taxes on those who are qualified or eligible and those who have the means to pay it. 
While Malaysians are to welcome and embrace the new luxury goods tax soon, however, business and tourism groups, including former Prime Minister Datuk Seri Ismail Sabri Yaakob warned that the introduction of the luxury goods tax can impede the number of foreign tourists from visiting Malaysia for shopping-related reasons.
Overall Summary Of High-Value Goods Tax 
<img src="https://r2.myc.my/3d798275b36b74a3682ea058d5a02403e385b343965fd6e8b2530c690e20e6dd" />
High-Value Goods Tax (HVGT), formerly known as &lsquo;Luxury Goods Tax&rsquo; are items that are not a necessity in daily use and are often associated with branded items of high social class and jaw-dropping prices. 
According to <a href="https://www.crowe.com/my/insights/new-luxury-goods-tax-in-malaysia">Crowe Horwath</a>, luxury goods include lavish Rolex, designer handbags like Louis Vuitton or Birkins, and many more that people flaunt their wealth in an extravagant manner. 
With reference to the local newspaper, The Star, the High-Value Goods Tax (HVGT) is taxable for luxury items like private jets, yachts, jewellery, and opulent cars. 
<img src="https://r2.myc.my/c4f1bde91a2ec299175dc29b2aae82f1a64be29d0f54e31725000071eb25a044" />
The price threshold that is deemed taxable are cars sold above RM200K as well as watches above RM20K, and jewellery amounting to RM10K and above. 
Luxury items often tempt university students to flaunt their affluence, whether it's on social media or among their peers, with the aspiration of immersing themselves in a world of opulence akin to the upper class. Regrettably, this pursuit of luxury can adversely impact their financial well-being as they tend to overspend beyond their means.&nbsp;So remember kids, don't flex your parents wealth ;)
<img src="https://media.tenor.com/IOgzlXfCtmQAAAAC/cash-flexing.gif" alt="Cash Flexing GIF - Cash Flexing Dollars - Discover &amp; Share GIFs" />
In the end, the luxury goods tax is said to impact most of those who are in the high social class region since they can afford to pay a much higher tax. With that being said, high taxes imposed on the mentioned class group are inevitable even if they prefer to evade it. 
What are your thoughts on this? Comment below, alternatively, follow us for more!
*Sources: Visual and Reference Credits to Social Media, The Star, Crowe Horwath, NST, Malay Mail &amp; various cross-references for context.
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Inevitable luxury goods tax is around the corner. 

52c4eec04eec22cb85e65dff57a4d4d526e6cb283e8e69e695e0b49f665669e5

Anwar Announces Implementation Of High-Value Goods Tax Starting 1 May 2024

Shopee sellers are bracing for yet another increase in operational costs as the e-commerce platform confirmed a hike in its SPayLater seller fee. The change, set to take effect on 8 May 2025, will see the fee rise from 3.5% to 4.5% for all completed orders involving the SPayLater payment option.
The update was announced through Shopee&rsquo;s official Seller Education Hub, continuing a trend of rising charges for merchants using the platform.
What Is SPayLater? 
<img src="https://r2.myc.my/a62796e4303ff33bf724897f79a3f39b982bad43119b1080a6710fedfa3de146" />
SPayLater is Shopee&rsquo;s Buy Now, Pay Later (BNPL) scheme, designed to give buyers flexibility in managing their purchases. The feature enables customers to split their payments over installment plans ranging from one to 24 months. Instalments up to three months typically carry no extra fees for buyers, but longer tenures can incur charges of up to 36%, depending on the duration.
However, while buyers may choose whether or not to use SPayLater, sellers are automatically enrolled in the programme with no option to opt out. This means they must absorb the associated transaction fee regardless of whether they benefit directly from the instalment feature.
Why Are Sellers Frustrated?
&nbsp;<img src="https://r2.myc.my/e816e805f983200358e1b1830eb38cfdc3be9218e22e47533de142280683cf1c" />
The fee hike has been met with widespread frustration among Shopee merchants, many of whom took to online seller communities to express their discontent. One recurring point of criticism is the lack of transparency&mdash;Shopee has not provided any formal explanation for the increase.
Many sellers are questioning why they are being penalised when it is ultimately the buyer&rsquo;s decision to use the SPayLater facility. The platform&rsquo;s insistence on making SPayLater mandatory for eligible sellers has only fuelled further resentment.
A number of sellers have even suggested raising their prices to cushion the impact of the new fee, potentially making Shopee less competitive for buyers as a result.
Sellers Speak Out: &ldquo;It&rsquo;s Getting Too Much&rdquo;
Among those voicing concern is Loh, a power tool seller who requested partial anonymity. Speaking to local media, Loh said that the compounding cost of selling on Shopee&mdash;including this new SPayLater fee&mdash;is driving him to reconsider the platform entirely.
&ldquo;My business has to contend with more and more extra fees, and I&rsquo;d need to hire someone just to operate and manage the sales channel,&rdquo; he said. &ldquo;That&rsquo;s pushed my business away from focusing too much effort towards selling on Shopee.&rdquo;
A Pattern of Increasing Charges
&nbsp;<img src="https://r2.myc.my/5268806b0bc67a485230899cca302a30408a47ee615a61836d3eb4fcd5c7d8bc" />
This latest update follows a previous hike in August 2024, when Shopee increased its general Transaction Fee for sellers from 2% to 3.5%&mdash;a move that excluded SPayLater and credit card payments at the time. That change, too, received criticism from small business owners struggling to maintain margins on the platform.
It&rsquo;s also worth noting that the new 4.5% SPayLater fee is subject to Malaysia&rsquo;s 8% Sales and Service Tax (SST), effectively making the total cost to sellers even higher.
Shopee&rsquo;s Justification &mdash; and What&rsquo;s Missing
While Shopee has highlighted that SPayLater can increase a seller&rsquo;s gross merchandise value by offering flexible payments to buyers, it has not justified the fee hike directly or provided any context for the additional cost burden. The omission has left many sellers feeling alienated, especially as BNPL platforms typically share costs across both buyers and sellers in a more transparent manner.
What&rsquo;s Next for Shopee Sellers?
As sellers scramble to adjust to the updated fee structure, questions remain about Shopee&rsquo;s long-term strategy and its impact on small and medium-sized businesses. If costs continue to rise without improved support or clearer communication, more sellers like Loh may look to alternative platforms or offline sales.
For now, the 4.5% fee for SPayLater orders will go into effect from 8 May 2025, and sellers will have no choice but to comply &mdash; or reconsider their future on the platform.
&nbsp;
*Sources: Visual and Reference Credits to Social Media &amp; various cross-references for context.
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To offset the higher fee, some sellers may begin raising their product prices.

d833dc61e66b6ef0a5823f527e207e67a587df0bf7f6b63aee2eaa945ecfefb6

Shopee Hikes SPayLater Seller Fee To 4.5% From 8 May

Malaysia&rsquo;s real wages have deteriorated drastically over the past four decades, leaving today&rsquo;s workforce with significantly reduced purchasing power, former Bank Negara Malaysia (BNM) Governor Tan Sri Muhammad Ibrahim warned in a recent interview with Sinar Harian. He remarked that many Malaysian graduates are now trapped in low-income jobs despite the country&rsquo;s economic growth, and are increasingly unable to meet basic life milestones such as home or car ownership.
Recalling his own experience, Muhammad said he earned RM1,300 upon entering the job market in 1984. Today, a typical fresh graduate earns between RM2,000 and RM3,000 monthly&mdash;a marginal increase in nominal terms that doesn&rsquo;t reflect the sharp rise in living costs. When adjusted for inflation&mdash;assuming a conservative annual rate of 5%&mdash;today&rsquo;s graduates should be earning closer to RM7,000 to RM8,000 to match the purchasing power of their 1980s counterparts.
&ldquo;In real terms, salaries today are only a third of what they used to be,&rdquo; he said, adding that if current trends continue, today&rsquo;s young people may never enjoy the same quality of life his generation did.
The Rise of the Low-Income Graduate
&nbsp;<img src="https://r2.myc.my/8b9b1df643980df936b15d80d18d4cd0dc132c1876493e893f16a7f82f9ea0b9" />
Quoting recent data from the Ministry of Higher Education, Muhammad pointed out that around 40% of university graduates today earn less than RM2,000 per month in their first job. He believes this is a clear indication that the country&rsquo;s education and economic systems are not aligned with the demands of a competitive, modern workforce.
&ldquo;Without major reforms in our education and economic frameworks, we are condemning our youth to a future dominated by low-skilled, low-paying jobs,&rdquo; he said. He warned that Malaysia continues to lag behind other nations that were once on par with or even behind Malaysia in the 1960s, including Taiwan, South Korea, China, and Japan&mdash;all of which now enjoy far higher standards of living due to sustained structural reform.
Foreign Labour Suppressing Wage Growth
&nbsp;<img src="https://r2.myc.my/5406ec1a17a9d7bf3194d18b8d4f0f3a9b308046fa34fae7aa9052f441ee73c0" />
Muhammad also addressed the impact of Malaysia&rsquo;s heavy reliance on foreign labour, which has contributed to wage stagnation&mdash;particularly for the country&rsquo;s B40 income group. As of 31 December 2024, there were 16.78 million workers in the country, with 2.37 million or roughly 14% of them being foreign workers.
These foreign workers primarily fill 3D (dirty, dangerous, and difficult) jobs in sectors such as construction, manufacturing, agriculture, food services, and domestic work. While these jobs are often shunned by locals, the influx of low-cost labour from countries like Indonesia, Bangladesh, and Nepal has created wage suppression for Malaysians in similar roles.
&ldquo;When employers can hire workers cheaply, they have no incentive to raise wages for locals. This affects our citizens directly, particularly those in the B40 segment,&rdquo; Muhammad explained.
A Growing Brain Drain: Nurses, Labourers, and the Search for Better Pay
&nbsp;<img src="https://r2.myc.my/98e2ef14dd46045ab74a765328aa4a01be2305e38cc96f307eb39f9fb5a9095d" />
Malaysia is not only failing to retain its skilled workforce&mdash;it is also losing talent to neighbouring countries with better wages. Muhammad highlighted that many local nurses are now migrating to Singapore, Saudi Arabia, or the UAE, where they can earn two to four times more than they would at home.
For example, JobStreet data shows that a nurse in Malaysia earns between RM2,700 and RM3,400 a month, while in Singapore, the salary ranges from RM11,000 to RM13,000. Even Saudi Arabia offers nearly RM7,000 per month.
Beyond white-collar professionals, Muhammad noted an increase in Malaysians crossing into Singapore to perform menial work. &ldquo;This isn&rsquo;t just brain drain&mdash;it&rsquo;s now even low-skilled drain,&rdquo; he said. &ldquo;If we don&rsquo;t address this soon, Malaysia may one day become a labour-exporting country, with our children working as maids or labourers abroad.&rdquo;
Income Reclassification Misses the Bigger Picture
In response to the government&rsquo;s recent proposal to update income classifications&mdash;changing the B40, M40, and T20 system to B20, M50, and T30 based on consumption data&mdash;Muhammad said the new categorisation risks masking the real challenges of wage stagnation and cost-of-living pressures.
He argued that income-based benchmarks remain critical, as consumption patterns can be misleading, particularly when driven by debt or necessity. &ldquo;If you use the older income definitions, the B40 group probably now encompasses 60% of the population, not just 40%, due to post-COVID economic strain, low savings, and wage stagnation.&rdquo;
GDP Growth Is Not the Only Measure of Progress
&nbsp;<img src="https://r2.myc.my/22a9e4e83055f7cdd1d63ffcdcda10cf416dc4f30fb6da1e70054dc4586bb5bf" />
Muhammad also criticised the nation&rsquo;s obsession with GDP growth as a benchmark for success. &ldquo;GDP doesn&rsquo;t put food on the table,&rdquo; he said bluntly. &ldquo;Real progress should be measured through employment quality, wage growth, and job structure&mdash;not aggregate output.&rdquo;
He noted that at international forums such as the World Economic Forum in Davos, discussions in developed countries have shifted from GDP to employment outcomes. &ldquo;The real question they ask is: what kinds of jobs are being created? That&rsquo;s where Malaysia needs to start focusing,&rdquo; he added.
Urgent Reforms Needed to Avoid Long-Term Decline
Despite the grim outlook, Muhammad said Malaysia still has time to reverse course. He pointed to the remarkable growth trajectories of East Asian economies that once had lower per capita incomes than Malaysia but have since surged ahead through long-term reform in education, technology, and governance.
&ldquo;We cannot continue benchmarking ourselves against regional peers who are also struggling. We must aim higher,&rdquo; he said.
He concluded with a warning: &ldquo;Without a bold and decisive push for structural change, we risk raising a generation that is poorer than the last, unable to afford homes, education, or healthcare, and forced to look overseas for dignity and opportunity.&rdquo;
What are your thoughts on this? Let us know in the comments. 
&nbsp;
*Sources: Visual and Reference Credits to Social Media &amp; various cross-references for context.
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Adjusted for inflation, graduate salaries today should be at least RM7,000 to RM8,000. 

1254876841663624d39e980db9c2b93f80e0bd826af3bf2c5e6c4faf4ff6f6b7

Former BNM Governor: Malaysian Real Wages Have Dropped Threefold Since The 1980s

Conservative American commentator Bill O&rsquo;Reilly has reignited tensions with Malaysia after doubling down on controversial remarks suggesting Southeast Asian countries, including Malaysia, lack the financial means to benefit from Chinese trade relations. The former Fox News host&rsquo;s comments drew sharp criticism from Prime Minister Datuk Seri Anwar Ibrahim, who accused O&rsquo;Reilly of holding a worldview rooted in colonialism and racial superiority.
Xi Jinping&rsquo;s Regional Tour Sparks Economic Debate 
&nbsp;<img src="https://r2.myc.my/2f7aebc041329cdd6e457b355330ed4e677bf6ab968aa120dfb644b6e0da3bc7" />
The dispute stems from Chinese President Xi Jinping&rsquo;s recent diplomatic tour of Malaysia, Vietnam, and Cambodia &mdash; a strategic move by Beijing in light of escalating trade tensions with the United States, including a newly imposed 145% tariff on Chinese goods.
O&rsquo;Reilly responded to Xi&rsquo;s visit by questioning the economic value of China&rsquo;s outreach to the three Southeast Asian nations. He suggested these countries lacked the financial capacity to purchase Chinese-made products, sarcastically declaring: &ldquo;We have the money, we buy stuff. The &lsquo;Malays&rsquo; aren&rsquo;t gonna buy your stuff. They don&rsquo;t have any money.&rdquo;
His use of the ethnic term &ldquo;Malays&rdquo; to generalise the entire Malaysian population further provoked backlash online, with many accusing O&rsquo;Reilly of cultural ignorance and racial insensitivity. Read: <a href="https://myc.my/articles/4248/xi-jinpings-southeast-asia-tour-draws-mockery-from-us-commentator-but-malaysias-economic-numbers-tell-a-different-story">Xi Jinping&rsquo;s Southeast Asia Tour Draws Mockery From US Commentator &ndash; But Malaysia&rsquo;s Economic Numbers Tell A Different Story</a>
Anwar Hits Back: &ldquo;Xenophobia, Racism, and Colonial Arrogance&rdquo;
&nbsp;<img src="https://r2.myc.my/08bbca4443221f96e4102a5acfecd8f583bbc2966c981a0e99634993d3cc665c" />
In a strong rebuttal, Prime Minister Anwar Ibrahim lambasted O&rsquo;Reilly&rsquo;s statements as not only factually flawed but also emblematic of a deeper, more insidious mindset.
&ldquo;He is clearly trapped in a narrow worldview shaped by colonialism, racism, and xenophobia,&rdquo; said Anwar, who also serves as Malaysia&rsquo;s Finance Minister. &ldquo;It reflects a deep ignorance of the socioeconomic realities in Southeast Asia and a belief that only their group or nation is successful.&rdquo;
Anwar&rsquo;s remarks were widely supported by Malaysians and regional observers, who viewed O&rsquo;Reilly&rsquo;s comments as dismissive of the economic progress made by developing nations in Asia.
O&rsquo;Reilly Responds with More Provocation &mdash; and Geography Errors
In a subsequent YouTube video, O&rsquo;Reilly read out Anwar&rsquo;s response, appearing both amused and unrepentant. He reiterated his claim that Malaysians &ldquo;don&rsquo;t have money&rdquo; by citing Malaysia&rsquo;s household income per capita, which he claimed stands at US$5,731 annually (~RM25,110), compared to the US figure of US$42,220 (~RM184,585).
&ldquo;That's eight times higher,&rdquo; O&rsquo;Reilly declared. &ldquo;So if you want to buy a little hat, and you're only making five grand a year, you're not gonna buy it. You're not getting Chinese takeout either in Kuala Lumpur. You're barely eating.&rdquo;
He added, &ldquo;China is not going to be able to sell its stuff in your country, or Vietnam, or Cambodia. Got it?&rdquo;
<iframe src="https://www.youtube.com/embed/V85NEV6pQZM" width="560" height="314" allowfullscreen="allowfullscreen"></iframe>
Despite the inflammatory tone, O&rsquo;Reilly did attempt to soften his comments by acknowledging that Malaysia is a &ldquo;beautiful&rdquo; country &mdash; albeit one he described as &ldquo;complicated.&rdquo; He also claimed he wanted the country to succeed but cheekily concluded, &ldquo;this &lsquo;colonialist&rsquo; has told the truth.&rdquo;
However, the commentator went on to confuse Malaysia with Indonesia, wrongly stating that former US President Barack Obama was &ldquo;partially raised in Malaysia.&rdquo; In fact, Obama spent part of his childhood in Indonesia &mdash; an entirely separate country. The factual gaffe further undermined O&rsquo;Reilly&rsquo;s credibility, especially among viewers in Southeast Asia.
The Flawed Economic Comparison: A Misunderstanding of Local Realities
&nbsp;<img src="https://r2.myc.my/ce282d27b51434ea8b4d878053177e3f809da63fcc1e8d47c8593eff0347b0dc" />
While the household income figures quoted by O&rsquo;Reilly are broadly accurate &mdash; with Malaysia&rsquo;s data taken from CEIC and correct as of late 2022 &mdash; his interpretation of those numbers lacks nuance. Economic analysts were quick to point out that comparing raw income figures between two vastly different economies without considering the cost of living and purchasing power parity (PPP) paints a misleading picture.
According to forecasts from Statista, Malaysia&rsquo;s household disposable income per capita is projected to rise to RM32,228 (~USD7,370) by 2025. When adjusted for PPP, the income disparity between Malaysia and the US narrows considerably, offering a more accurate representation of everyday purchasing power.
Furthermore, O&rsquo;Reilly&rsquo;s claim that Malaysians are &ldquo;barely eating&rdquo; and can&rsquo;t afford Chinese take-out in Kuala Lumpur drew widespread mockery online. In truth, Chinese cuisine is among the most common and affordable foods in Malaysia. Local Chinese restaurants, hawker stalls, and kopitiams offer hearty meals for as little as RM6 to RM20 &mdash; easily within the reach of most working and middle-class residents.
A Clash of Cultures &mdash; or Just Misinformation?
&nbsp;<img style="display: block; margin-left: auto; margin-right: auto;" src="https://r2.myc.my/bf8f9e0672ef18e5532af95f858eae6bc18c59785f744c785baa6a73d7f42766" />
O&rsquo;Reilly&rsquo;s long-standing relationship with US President Donald Trump and his deep roots in American conservative media have helped shape public opinion in the United States for decades. However, his latest comments have highlighted a broader issue: the cultural blind spots and outdated assumptions that still exist in Western commentary on Asia.
While O&rsquo;Reilly may find support from sections of the American right, many in Southeast Asia viewed his remarks as tone-deaf, outdated, and laced with condescension. As Anwar and others have pointed out, such statements not only misrepresent the region&rsquo;s progress but also reinforce dangerous stereotypes about the Global South.
Here&rsquo;s some of the comments from netizens:
<img src="https://r2.myc.my/286074c669df0c5f11a2f4de26b0e5871fcfc66b5acef40c8ea242c653e5fb72" />
Conclusion: More Than Just a Viral Clip
What began as a throwaway comment in a YouTube video has now morphed into a diplomatic and cultural flashpoint, illustrating how global discourse is increasingly shaped by online personalities with outsized influence.
In this case, Bill O&rsquo;Reilly&rsquo;s reductive take on Southeast Asia&rsquo;s economy sparked a much-needed conversation &mdash; not just about income disparities, but about the lingering legacies of colonial attitudes and the importance of understanding nations on their own terms.
&nbsp;What are your thoughts on this? Let us know in the comments.&nbsp;
&nbsp;
*Sources: Visual and Reference Credits to Social Media &amp; various cross-references for context.
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Even with eight times less household income per capita, Malaysians don’t suffer as much as the average American.

eeb00258686da6dff7bf601317ec304fe039ba4a5f37a93c56e77539c5199872

Bill O’Reilly Doubles Down On “No Money” Claim As Anwar Ibrahim Fires Back

As the United States reinstates heavy tariffs on Chinese imports under former President Donald Trump, a new trade controversy is emerging &mdash; and Malaysia finds itself unwillingly at the centre of it. Reports have surfaced that unscrupulous freight brokers based in China are rerouting goods through Malaysia and mislabelling them as "Made in Malaysia" to evade the steep US duties, raising serious concerns over the potential damage to Malaysia's trade reputation.
From Trade Partner to Transit Point: Malaysia&rsquo;s Role in a Rising Smuggling Tactic
&nbsp;<img src="https://r2.myc.my/4d8cc18d4a0ca3a7db37c9bc2a167dafe4a6f5789aa5c653a38e7fb11337eb08" />
According to reports by Malay Mail and Bloomberg, China-based logistics brokers have been offering US online retailers highly suspicious services to cut down on shipping costs. These include falsifying the country of origin and undervaluing shipments &mdash; with Malaysia being one of the key countries misused in this deception. Some brokers even go as far as posing as importers themselves, offering to handle the documentation and falsely declare the goods as Malaysian-made.
&ldquo;Many clients are now choosing to route Chinese products through Malaysia and claim they are made here,&rdquo; said one freight broker to Bloomberg. The motivation is clear: while Chinese goods are currently facing tariffs as high as 145% in the United States, products genuinely originating from Malaysia are only subject to a 24% import duty.
The scheme is not only unethical but also illegal under US customs law. False declarations of origin constitute a serious offence and may result in civil or criminal penalties for all parties involved &mdash; including sellers, brokers, and importers. As of now, the US Customs and Border Protection (CBP) has not officially confirmed whether enforcement has been ramped up, though they have reiterated that public reports and complaints through their online portal remain a key part of enforcement efforts.
Trump&rsquo;s Tariff Surge Sparks a Wave of Workarounds
&nbsp;<img src="https://r2.myc.my/6bcb751a7431f4b2e92f42c60b618422d15d5c3547bafa7eed5f254cc236183f" />
Read: <a href="https://myc.my/articles/4265/us-slaps-up-to-3521percent-tariffs-on-asean-solar-panels-threatening-malaysias-export-industry">US Slaps Up To 3,521% Tariffs On ASEAN Solar Panels, Threatening Malaysia&rsquo;s Export Industry</a> Read: <a href="https://myc.my/articles/4218/the-impact-of-new-us-tariffs-on-malaysia-jobs-prices-and-the-iphone">The Impact Of New US Tariffs On Malaysia: Jobs, Prices, And The iPhone</a>
This illicit practice appears to have surged after Trump&rsquo;s announcement earlier this month of a new round of trade tariffs, starting at 10% for all imports into the US. Specifically, China has been targeted with the steepest hikes &mdash; first 54%, then 104%, and most recently a staggering 145%. China retaliated by imposing 125% tariffs on US goods, prompting fears of a full-blown trade war echoing previous years.
Even Malaysia &mdash; previously unaffected by the bulk of US trade restrictions &mdash; was not spared. Under Trump&rsquo;s revised policy, Malaysian exports to the US now face a 24% import tariff. Although significantly lower than the Chinese rate, it still marks a steep increase from previous levels and could pose challenges for legitimate Malaysian exporters.
The escalating tariff war has caused an upheaval in the global supply chain. Some Chinese companies are now resorting to third-country transhipment strategies to sidestep duties &mdash; with Malaysia and even South Korea among the countries being exploited as part of this growing black market workaround.
South Korea Faces Similar Challenges with Mislabelled Chinese Goods
&nbsp;<img src="https://r2.myc.my/e4e9aa3a91010b9cc4c8d83659a4fbf4a16525928c0522d2834663ff1275d047" />
Malaysia is not alone in this predicament. South Korea, too, has discovered large-scale violations involving Chinese goods being falsely labelled as South Korean exports. According to the Korea Customs Service, a staggering 29.5 billion won (~RM91,000,000) worth of goods with incorrect origin labels were uncovered in just the first quarter of 2025 &mdash; with 97% of them destined for the US market.
The violations include Chinese-made cathode materials and surveillance equipment that were either reassembled in South Korea or relabelled outright before being shipped to the United States. Some of these goods had already been exported, while others were intercepted at the port.
In response, the Korea Customs Service has launched a special task force and is working closely with US authorities to crack down on these illegal transhipment practices. All violations are expected to be forwarded to prosecutors for legal action.
Malaysia Urged to Act Swiftly to Protect Its Trade Integrity
Malaysian trade analysts are now sounding the alarm. If this misuse continues unchecked, Malaysia&rsquo;s international credibility as a law-abiding trade partner could be at risk. The country's legitimate exporters may find themselves subject to heightened scrutiny by US authorities, leading to delays, increased compliance checks, and potential blacklisting.
There are growing calls for the Malaysian government to act decisively. Trade groups and analysts alike have urged authorities to investigate any abuse of Malaysia&rsquo;s national label and clamp down on foreign attempts to exploit its relatively favourable tariff position. They argue that failing to act could result in long-term reputational damage, making it harder for Malaysian exporters to maintain market access abroad.
&ldquo;Malaysia needs to take swift action to prevent being used as a cover for tariff evasion. This is not just about trade, but about safeguarding our nation's integrity,&rdquo; one analyst said
Understanding Tariffs and Why They Matter
&nbsp;<img style="display: block; margin-left: auto; margin-right: auto;" src="https://r2.myc.my/ebdd724d306175630884f79b28dbb2541fa11e0b59529929bfd382852e84cb8c" />
For those unfamiliar with trade policy, tariffs are essentially taxes imposed by one country on goods imported from another. The idea is to make foreign products more expensive, thereby protecting domestic industries and discouraging reliance on overseas suppliers.
But while tariffs serve a political and economic purpose, they also create ripple effects. For instance, Malaysian Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz previously explained that a shirt originally priced at USD 100 (~RM656.25) could cost as much as USD 154 (~RM673.75) after a 54% tariff &mdash; a cost that is typically borne by end consumers rather than corporations.
According to the Tax Foundation, tariffs are a regressive form of taxation. They disproportionately affect low-income households, who end up spending a larger share of their income on essential goods that have suddenly become more expensive due to import taxes.
A Trade War With Global Consequences
As Trump hints at a possible reduction in the 145% tariff on Chinese goods &mdash; stating it will "drop significantly, but not to zero" &mdash; the uncertainty continues to roil global markets. What is clear, however, is that countries like Malaysia must tread carefully. Being caught in the crossfire of a geopolitical trade war not only endangers economic interests but also risks entanglement in a global web of fraud and deception.
Malaysia must now navigate these turbulent waters with a firm stance, ensuring its name is not co-opted by foreign actors for unlawful gain, and upholding its hard-earned reputation as a responsible global trading partner. The time to act is now.
What are your thoughts on this? Let us know in the comments. 
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*Sources: Visual and Reference Credits to Social Media &amp; various cross-references for context.
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South Korea also uncovered falsely labelled goods, highlighting the scale of the transhipment schemes.

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Malaysia Caught In US-China Trade War As Chinese Firms Mislabel Exports To Avoid Tariffs

The United States has imposed sweeping new import duties on solar panels from four Southeast Asian countries &mdash; Malaysia, Vietnam, Cambodia, and Thailand &mdash; in a move that is shaking up the global solar industry. The decision, aimed at bolstering American manufacturers, has drawn sharp criticism from industry players in the region and may have far-reaching implications for solar supply chains, investment flows, and green energy goals.
Tariffs of Up to 3,521% Following Yearlong Investigation
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The new tariffs, announced by the US Department of Commerce, are the result of a year-long anti-dumping and countervailing duties (AD/CVD) investigation. The probe concluded that manufacturers in the four ASEAN countries unfairly benefitted from Chinese government subsidies and sold solar products in the US at below-market prices. The investigation was originally initiated during the Biden administration and pursued under pressure from a coalition of US solar manufacturers.
The resulting duties are staggering: Cambodia has been hit with the highest rate &mdash; a colossal 3,521% &mdash; after it reportedly ceased cooperation with the US probe. Vietnam and Thailand face tariffs of up to 396% and 375% respectively. Malaysia, though assessed more leniently by comparison, still received a nationwide rate of 34.4%, with certain companies facing significantly higher duties due to a lack of cooperation. Jinko Solar, for example, was assessed at 40% for exports from Malaysia and 245% for Vietnam. Trina Solar faces levies exceeding 375% for Thai exports and over 200% for those from Vietnam, while JA Solar modules from Vietnam could be taxed at around 120%.
US Seeks to Protect Domestic Manufacturers Amid Political Push
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The imposition of these tariffs aligns with US efforts to revitalise its domestic manufacturing base &mdash; a bipartisan goal under both former President Joe Biden and President Donald Trump. Under the Inflation Reduction Act, the Biden administration has pushed for greater domestic production of renewable energy components, including solar panels.
&ldquo;This is a decisive victory for American manufacturing,&rdquo; said Tim Brightbill, co-chair of Wiley&rsquo;s international trade practice and counsel for the coalition of solar companies that brought the case. He accused Chinese-headquartered solar companies of exploiting trade loopholes to undermine US firms and cost American workers their jobs.
American solar manufacturers such as Hanwha Q Cells and First Solar Inc. are likely to be among the beneficiaries of the new policy, which is intended to curb reliance on lower-cost imports and protect US market share.
Malaysia&rsquo;s Solar Sector Under Pressure
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The impact on Malaysia could be substantial. The country exported RM12.5 billion worth of photovoltaic (PV) products to the US in 2024 &mdash; around 33.4% of its total RM37.4 billion in solar exports. While Malaysia's blanket tariff rate of 34.4% is lower than those imposed on its regional peers, several companies have been subject to rates as high as 81.24%, mainly due to non-compliance with the investigation.
The Malaysia Photovoltaic Industry Association (MPIA) warned that the latest tariffs could be the final blow for Chinese-owned solar manufacturers operating in Malaysia, many of whom were already reeling from previous rounds of US trade restrictions. MPIA president Davis Chong noted that these firms were "almost killed off" by earlier tariffs and are now accelerating their exit from Malaysia, relocating production to other regions such as South Asia or the Middle East.
Several major Chinese players &mdash; including JinkoSolar, JA Solar, Risen Energy, and Longi Green Technology &mdash; have reportedly scaled back or suspended their Malaysian operations. Risen Energy, for example, had committed to a RM42 billion investment plan in Malaysia over 15 years but may now reconsider its future in the country.
Global Solar Oversupply and Market Reactions
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The global solar industry is already grappling with oversupply, and the new US tariffs could worsen the imbalance. Malaysian industry leaders have said they do not expect mass "fire sales" of solar panels unless manufacturers are looking to clear inventory ahead of plant closures. However, the market impact is being closely watched.
TA Securities has predicted only a "mild" short-term effect from excess supply, as solar panel prices are already near the bottom. MPIA&rsquo;s Davis Chong believes prices will likely stay below US$0.10 per watt, benefitting local solar installers and developers who continue to source most of their panels from China.
Malaysian installation firms such as Solarvest Holdings Bhd and Samaiden Group Bhd reported minimal earnings impact from the new tariffs, as they do not rely heavily on US exports and benefit from the global surplus in supply.
Risk of Broader Economic Fallout
Beyond the solar sector, concerns are rising over the potential macroeconomic impact on Malaysia&rsquo;s role as a major player in the global renewable energy supply chain. Tan Sri Soh Thian Lai, president of the Federation of Malaysian Manufacturers (FMM), warned that the country&rsquo;s status as a global solar hub could be jeopardised. He cautioned that the new US duties may prompt manufacturers to halt production, delay expansion, or shift operations elsewhere.
Solar exports account for approximately 2.08% of Malaysia&rsquo;s total RM601.2 billion in electrical and electronics exports in 2024. While this may seem modest, the solar industry is strategically important for Malaysia&rsquo;s green economy transition and its investment attraction strategies, particularly through tax holidays and other incentives.
Looking Ahead: More Tariffs to Come?
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The US International Trade Commission (USITC) is expected to deliver a final ruling by 2 June 2025 on whether American solar manufacturers have indeed suffered material harm. If the USITC affirms the findings, the newly proposed tariffs will become permanent.
However, analysts warn that this may not be the end of US trade actions. Countries such as Indonesia, India, and Laos &mdash; which have seen growing solar manufacturing investments in recent years &mdash; could face similar scrutiny and duties in the next wave of trade defence measures. Indonesia, for instance, is projected to host over 20 gigawatts of foreign-owned solar capacity by mid-2025, up from just 1 gigawatt in 2022.
JA Solar, for its part, has already announced it will open a new manufacturing plant in Oman by the end of 2025 as part of a broader strategy to diversify away from tariff-hit countries and reduce reliance on the US market.
Conclusion: A Crossroads for the Solar Industry
The US tariffs mark a pivotal moment for the global solar industry. While they promise to stimulate American manufacturing and address long-standing complaints about unfair trade practices, they also threaten to fragment international supply chains and undermine cost-effective access to renewable technologies. For Malaysia and its ASEAN peers, the challenge lies in adapting to this new trade landscape while safeguarding jobs, investments, and long-term green energy ambitions.
As solar panel prices fall and global oversupply persists, the next few months could be critical in determining whether Southeast Asia can remain a key pillar of the solar energy revolution &mdash; or whether the centre of gravity will shift elsewhere.
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*Sources: Visual and Reference Credits to Social Media &amp; various cross-references for context.
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Despite a supposed 90-day pause, the US just hit four ASEAN nations with massive new solar tariffs.

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