On
6 July 2018, Trump will impose 25% tariff on USD50 billion Chinese
technology products. China has indicated that it will retaliate by
imposing tariff on equivalent amount of US products. In return, Trump
threatened to impose further USD200 bil on Chinese exports.
As Malaysia exports a lot of intermediate goods to China (which are subsequently turned into finished products exported to US), all these are bad news for us, right ? Not necessarily. It depends on which part of the supply chain you are in.
As we move closer to the tariff date, bits and pieces of information about what sectors will benefit begin to appear.
(a) LED Manufacturing Industry
(b) Furniture Industry (in the event of a full blown trade war)
Poh Huat released its quarterly report yesterday. The following are the company's comments in relation to its prospects :
As Malaysia exports a lot of intermediate goods to China (which are subsequently turned into finished products exported to US), all these are bad news for us, right ? Not necessarily. It depends on which part of the supply chain you are in.
As we move closer to the tariff date, bits and pieces of information about what sectors will benefit begin to appear.
(a) LED Manufacturing Industry
Consider
light-emitting diodes, the tiny parts that make LED light bulbs
illuminate and are used in many industrial settings. The US imported
US$637 million (S$865 million) worth of them from China last year, more
than any other country. But that does not mean China is the only
supplier. Japan and Malaysia exported an additional US$593 million in
LEDs in the US combined.
So
for US firms that import the diodes and incorporate them in their
products, such as solar-powered street lamps, China is not the only
option. The question is whether other countries not subject to the 25
per cent tariff can accommodate a potential surge of demand.
In
Malaysia, the LED industry senses opportunity. "The trade war, I would
say it will benefit us if it really keeps going in the direction of
tariffs," said Mr Daniel Fong, senior regional manager of Oversea
Lighting and Electric in Kuala Lumpur.
"The
US market is cutting off all ties to China, and in that sense, we have a
bigger opportunity to benefit the US market with Malaysia-made
products."
https://www.straitstimes.com/asia/east-asia/what-a-us-china-trade-war-looks-like-on-the-front-lines(b) Furniture Industry (in the event of a full blown trade war)
Poh Huat released its quarterly report yesterday. The following are the company's comments in relation to its prospects :
http://klse.i3investor.com/blogs/icon8888/162902.jsp
