Kuala Lumpur (Reuters) – Malaysia said on Thursday (5) that any attempt by the new government of United States President-elect Donald Trump to impose tariffs on Brics countries for trying to create a new currency or use alternatives to the dollar could cause disruptions to the global semiconductor supply chain.
BRICS, which includes some of the main emerging economies, was initially made up of Brazil, Russia, India and China and has since expanded to include other countries.
Malaysia has applied to join the bloc, which aims to challenge a world order dominated by Western economies, but has not yet been officially accepted as a member.
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Malaysian Trade Minister Tengku Zafrul Aziz said the country was closely monitoring developments after Trump said BRICS members would face 100% trade tariffs unless they committed not to create a new currency or support another currency that would replace the US dollar.
Tengku Zafrul noted that the United States is Malaysia’s third-largest trading partner and that US companies are the main investors in the country’s semiconductor sector. Malaysia is a major hub that accounts for about 13% of chip testing and packaging worldwide.
“As such, any move to impose a 100% tariff will only harm both parties, who depend on each other to avoid disruptions to the global supply chain,” he said in a parliamentary response.
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He added that while BRICS countries have discussed reducing dependence on traditional trade currencies such as the US dollar, there has been no official decision on de-dollarization efforts.
The group does not have a common currency, but long-running discussions on the issue gained some momentum after the West imposed sanctions on Russia over the war in Ukraine.
On Monday, Russia said any U.S. attempt to force countries to use the dollar would backfire and only strengthen efforts among countries to switch to national currencies in trade.
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