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...
Key Takeaways
U.S. President Donald Trump confirmed an extension of the tariff truce with Mexico, calling it a positive outcome for U.S. trade interests.
The move provides temporary relief from higher duties set to take effect on Nov 1, preserving current tariff rates at 25%.
Markets see the decision as a moderating gesture ahead of Trump’s high-stakes trade meeting with China’s Xi Jinping in South Korea this week.
Tariff Truce Extended — Mexico Gets Breathing Room
Speaking aboard Air Force One en route to South Korea, President Trump said he is satisfied with the tariff extension deal announced by Mexican President Claudia Sheinbaum.
💬 “I like the extension with Mexico. We’re doing very well with that extension. We get a lot of tariffs — they’re paying a lot of money,” Trump said.
Under the agreement, the U.S. will delay tariff hikes on Mexican goods — including autos and manufacturing components that fall outside USMCA content rules — from 25% to 30%, granting Mexico additional weeks to finalize a comprehensive trade pact.
Mexico’s Economy Minister Marcelo Ebrard, who is leading the country’s delegation at the APEC summit in Gyeongju, South Korea, said the extension allows both sides to “finish the work constructively.”
Tariffs as Industrial Leverage
Trump emphasized that tariffs are achieving their goal of reshoring automotive production back to the U.S.
💬 “These tariffs are convincing car companies to move manufacturing back to America,” he said, highlighting investments by major automakers including Toyota Motor Corp.
Trump claimed that Toyota’s chairman, Akio Toyoda, had pledged to build a new U.S. plant worth up to US$10 billion (RM41.9 billion) — though Toyota later clarified that no official announcement or investment figure has been finalized.
The White House sees these investments as evidence that tariffs are creating jobs and supporting domestic capacity expansion, particularly in the Midwest industrial belt ahead of the 2026 election cycle.
Contrast with Canada
The extension with Mexico comes in sharp contrast to Trump’s tense trade relations with Canada, which faces the prospect of a new 10% tariff escalation.
The move follows a televised ad by Ontario’s government criticizing U.S. trade policy, which reportedly angered Trump.
In response, the President vowed to impose additional duties on Canadian goods, reigniting trade tensions with America’s northern neighbour even as talks with Mexico and China progress.
Market Implications
The tariff pause with Mexico provides short-term relief for auto and manufacturing sectors with cross-border exposure, while also tempering fears of escalating North American trade frictions.
| Impact Area | Market Effect | Outlook |
|---|---|---|
| U.S.–Mexico Trade | Positive — reduced policy risk for exporters | Temporary; watch for follow-up deal |
| Automotive Sector | Supportive for OEMs with U.S. expansion plans | Medium-term boost if investments materialize |
| Canadian Trade | Negative headline sentiment | Tariff escalation risk persists |
| Global Markets | Neutral to slightly positive | Investors await Trump–Xi outcome |
With U.S. equities hovering at record highs and AI-led sectors driving optimism, the tariff truce offers further geopolitical stability — at least temporarily — for investors assessing 2026 global growth risks.
Investor Takeaway
Trump’s tone suggests a strategic pivot toward negotiation over confrontation — extending olive branches to key trade partners while preserving leverage ahead of U.S.–China talks.
Bullish signals:
Tariff truce removes near-term pressure on North American supply chains.
Encouraging signals for automakers (F, GM, TM) and industrial suppliers.
Risks remain:
Unclear duration of Mexico’s tariff extension.
Renewed tariff rhetoric toward Canada could spill over into broader trade volatility.
The Bottom Line
The U.S.–Mexico truce extension reinforces Trump’s “tariff diplomacy” strategy — using duties as bargaining tools while extracting concessions from trading partners.
For markets, the pause offers a brief window of calm ahead of the more consequential Trump–Xi trade summit, where investors are betting on another breakthrough that could set the tone for year-end global risk appetite.
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