Malaysia Warns of Tariff Impact on BRICS Countries

KUALA LUMPUR (Reuters) – Malaysia stated on Thursday that any tariffs imposed by the incoming Trump administration on BRICS countries, aimed at preventing the creation of a new currency or alternatives to the dollar, could disrupt the global semiconductor supply chain.

The BRICS grouping, which initially included Brazil, Russia, India, and China, has since expanded to encompass additional countries. Malaysia has applied to join this bloc, which seeks to challenge a global order predominated by Western economies, although it has not yet gained official membership.

Trade Minister Tengku Zafrul Aziz mentioned that Malaysia is closely monitoring developments following remarks from U.S. President-elect Donald Trump about imposing 100% tariffs on BRICS nations unless they desist from creating a new currency or supporting one that could replace the United States dollar.

Zafrul emphasized that since the U.S. is Malaysia’s third-largest trade partner and American companies are key investors in its semiconductor industry, any implementation of such tariffs would harm both nations, which rely on one another to prevent disruption in the global supply chain.

While BRICS nations have contemplated reducing reliance on traditional trade currencies like the U.S. dollar, no official decision has been reached regarding de-dollarisation efforts. The grouping currently lacks a common currency, but discussions on this topic have intensified following Western sanctions on Russia due to the conflict in Ukraine.

On Monday, Russia asserted that any U.S. attempts to compel nations to use the dollar would be counterproductive, potentially bolstering countries' efforts to shift towards national currencies in trade.