KUALA LUMPUR, Dec 4 (Bernama) -- Bursa Malaysia rallied to close broadly higher on Wednesday amid strong buying interests mainly in utility and technology stocks, with the benchmark index gaining 0.44 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 7.13 points to 1,614.09 from Tuesday’s close of 1,606.96. The index opened marginally higher at 1,606.97 and moved between 1,606.53 and 1,616.03 throughout the day. Advancers thumped decliners 727 to 381 on the broader market, with 522 counters unchanged, 781 untraded and 10 suspended. Turnover advanced to 3.60 billion units valued at RM3.30 billion versus 3.32 billion units valued at RM3.30 billion on Tuesday.
Mexican President Claudia Sheinbaum has vowed retaliatory tariffs if US President-elect Donald Trump enforces his proposed 25% across-the-board tariff, a move Mexico warns could cost the US 400,000 jobs and significantly increase consumer prices.
Key Points:
Tariff Impact:
- Mexico’s Economy Minister Marcelo Ebrard highlighted that the tariffs could harm US automakers like Ford, General Motors, and Stellantis, with pickup truck prices expected to rise by US$3,000.
- Barclays analysts predict the tariffs could "wipe out all profits" for Detroit's automakers.
- The automotive sector, Mexico’s largest manufacturing industry, accounts for 25% of North American vehicle production.
Retaliation:
- Mexico is preparing its own tariff measures against the US, despite Sheinbaum's preference for regional cooperation over conflict.
Trump’s Stance:
- Trump insists the tariffs aim to control fentanyl flows and illegal migration into the US.
- After a phone call with Sheinbaum, Trump claimed Mexico had agreed to curb migration, calling the discussion "productive."
Economic Ramifications:
Peso Performance:
- The peso rebounded, strengthening by nearly 1% after Trump's comments.
USMCA Concerns:
- Analysts warn that the tariffs would violate the USMCA trade pact and could trigger renegotiations in 2026.
- Protectionism risks could lower US economic growth, increase unemployment, and drive inflation, according to Grupo Financiero Banorte.
Trade Figures:
- US-Mexico-Canada Agreement (USMCA) trade reached US$1.78 trillion in the first nine months of 2024, underscoring the importance of the partnership.
Outlook:
While Trump's tariff threats are seen by some as negotiating tactics, the potential fallout could strain US-Mexico relations, disrupt North American supply chains, and challenge the region's economic integration. Mexico continues to advocate for regional collaboration to strengthen the USMCA bloc instead of fostering division.
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