KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
The Trump administration is preparing a sweeping tariff package that may mark the most aggressive protectionist turn in US history since the 1930s. Markets are watching closely as risks of recession, inflation, and global retaliation mount.
Policy Overview
President Trump is poised to unveil a new round of “reciprocal tariffs”, possibly as soon as Wednesday, which would target countries with trade barriers or tax structures deemed unfair to US exporters.
Tariffs could raise average US import duties by up to 28 percentage points — the most since the 1800s.
The plan would replace the US’s long-held multilateral trade commitments under GATT/WTO with bilateral arrangements.
Key trading partners including Europe, China, Canada, and Southeast Asia are expected to be affected.
Economic Impact Forecasts
Bloomberg Economics projects a 4% hit to US GDP over 2–3 years under a maximalist scenario—more than $1 trillion in output lost.
Consumer prices could rise 2.5%, compounding existing inflation pressures.
Investment confidence is deteriorating, with bookings at logistics firms already down significantly.
Market and Policy Response
US equities underperformed in Q1, with the S&P 500 entering correction territory.
ECB President Christine Lagarde has warned EU leaders to prepare for a “worst-case” trade scenario.
The Fed cut its 2025 US growth forecast from 2.1% to 1.7% even before the tariffs were confirmed.
OECD and Moody’s now place the US back on recession watch.
Business Sentiment Split
Steelmakers and some US brands support the plan, citing unfair competition.
Multinationals and retailers (e.g., Tesla, JM Smucker, DataDocks) are warning of cost escalation, supply chain disruptions, and retaliation risk.
Consumer sentiment has fallen to its lowest in over two years.
Strategic Context
Trump’s strategy mirrors the 1930 Smoot-Hawley tariffs, which deepened the Great Depression.
The proposed tariffs aim to offset revenue losses from planned tax cuts, while reshaping US trade relationships.
Officials claim tariffs will attract $2T in investment and raise $700B in revenue, but long-term effectiveness is debated.
Key Takeaways
Tariff escalation could trigger a global slowdown and introduce volatility across supply chains, FX, equities, and commodities.
US companies face higher input costs, rising consumer backlash abroad, and investment delays at home.
Reversal of decades of multilateralism marks a turning point in global trade governance.
Markets should prepare for higher uncertainty, slower growth, and potential retaliation-led stagflationary pressures.
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