This article first appeared in The Edge Financial Daily on February 8, 2018

KUALA LUMPUR: Malaysian manufacturing companies exporting to the US will not be affected by the 30% import duty on solar panel equipment that was recently imposed by US President Donald Trump, says International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

Mustapa said the issues surrounding the economic relations between Malaysia and the US is currently being addressed under the Trade and Investment Facilitation Agreement (Tifa).

“After discussion with [the] US under the Tifa umbrella, we were informed that Malaysian companies will not be adversely affected by the 30% duty,” he said.

Mustapa added that Malaysia is a major exporter of solar panels and its components, with an export value of US$4 billion (RM15.64 billion) for 2017.

Bloomberg reported last month that Trump had approved duties of as much as 30% on solar equipment made outside the US, a move that threatens to handicap a US$28 billion industry that relies on parts made overseas for 80% of its supply.

Speaking at a press conference yesterday, Mustapa also responded to a call by the Malaysian Palm Oil Association (MPOA) to halt trade deals with the European Union (EU) until the latter’s ban on palm oil is lifted.

The minister said it is not easy to just impose an outright boycott. “The nature of international business is a lot more complicated now,” he said.

“Malaysia is part of the global supply chain and so is Europe. There are a lot of components which comes from Europe which are required for Malaysian industry and similarly there are a lot of components made in Malaysia required for European industry,” he added.

Mustapa noted, however, that as a matter of policy, the cabinet has decided that Malaysia should review its trade with the EU. “The Malaysian government views this discrimination with grave concern and we've been talking to our contacts in Europe and other parts of the world [to explain] our position,” he said.