
MORE than four in 10 Malaysian businesses have turned their attention to the domestic market in response to rising tariffs and volatile trade policies, according to the latest HSBC Global Trade Pulse Survey 2025.
The survey, which polled 5,750 international firms across 13 markets — including 250 Malaysian companies — reveals a shifting trade strategy as Malaysian enterprises grapple with surging costs and persistent supply chain disruptions.
The top concern for 55% of Malaysian firms is the rising cost of doing business due to tariffs and related trade challenges.
To mitigate these pressures, 42% of companies have already pivoted toward serving local customers, with another 40% planning a similar shift.
Simultaneously, 37% have boosted inventory levels to manage disruptions, while nearly half (49%) intend to follow suit.
Yet, optimism endures. A overwhelming 91% of Malaysian firms expressed confidence in growing international trade — surpassing the global average of 89%.
Encouragingly, 73% said trade uncertainties have driven their businesses to evolve and explore new opportunities.
“Despite the challenges posed by the uncertain tariff and trade landscape, businesses in Malaysia are demonstrating resilience and adaptability in the way they operate,” said HSBC Malaysia CEO and head of banking Datuk Omar Siddiq (picture).
“While supply chains may be further reconfigured, there continues to be strong potential for local companies to leverage on Malaysia’s strong trade ties particularly in Asia.”
Notably, Malaysian companies are deepening trade relationships within Asia, with 61% aiming to increase business with China, South Asia (55%) and North Asia (44%).
Beyond the region, 32% of firms are eyeing expanded ties with both Europe and the US.
Omar noted that “markets like the US remain key trade destinations for Malaysia for high-value sectors such as electronics and semiconductors.”
The report also highlights an emerging appetite for innovation and operational restructuring.
About 64% of Malaysian companies have adopted new technology or digital platforms, while 48% have rolled out new products and services.
Growth initiatives are increasingly centred around regional expansion (57%) and cost optimisation (54%).
In terms of support, Malaysian businesses cite cash and liquidity management (64%), improved payment terms (56%) and supply chain financing (55%) as the most helpful tools to weather the current disruptions.
“With over 70% of Malaysian businesses anticipating sustained cost increases from the impact of tariffs and trade uncertainty on the cost of doing business and businesses facing an average 18% drop in revenue, the imperative for strategic adaptation is clear,” Omar noted.
“Despite uncertainties, the world is also full of opportunities. Navigating this climate requires not only agility, but strong partnerships to ensure sustained growth in a shifting global economy.”
The HSBC Global Trade Pulse survey was conducted from April 30 to May 12, 2025, and includes businesses with international operations and annual turnovers between US$50 million (RM211.16 million) and over US$2 billion. — TMR
- This article first appeared in The Malaysian Reserve weekly print edition
The post Malaysian firms pivot to domestic markets appeared first on The Malaysian Reserve.