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Malaysia’s BRICS Balancing Act Amid U.S. Tariff Threats

President Donald Trump’s return to the White House has reenergized his trademark brand of economic nationalism this time, with sharper geopolitical edges. One of his administration’s early foreign policy actions in his second, non-consecutive term is a renewed crackdown on countries aligning with BRICS, a coalition of emerging economies challenging U.S.-led global financial dominance.

Framing BRICS as “anti-American,” Trump recently announced a sweeping set of new tariffs, including a punitive 25% levy on goods from Malaysia, aimed at deterring participation in alternative trade blocs and efforts at de-dollarization.

While major BRICS members China, Russia, India, Brazil, and South Africa have dismissed the notion that their bloc is inherently adversarial to the U.S., the implications of Trump’s announcement extend well beyond BRICS’ core membership.

Countries like Malaysia, which have recently deepened ties with BRICS, are now caught in a strategic squeeze. For Malaysia, which aspires to full BRICS membership and currently serves as the 2025 ASEAN Chair, the choice is not merely economic it’s existential to its foreign policy identity and development strategy.

Malaysia’s BRICS Engagement: Strategic Vision or Risky Gamble?

Malaysia’s engagement with BRICS did not emerge suddenly or ideologically. Since 2024, under the leadership of Prime Minister Anwar Ibrahim, the country has sought to become a full member of the bloc.

The rationale is clear: BRICS offers an avenue to boost trade, attract foreign investment, and secure access to development financing through the New Development Bank (NDB). For Malaysia a middle-income country with ambitious infrastructure plans and limited fiscal space these tools are not just attractive; they are necessary.

In 2024, Malaysia-China trade hit RM396.14 billion, underscoring the strength of their 50-year diplomatic and economic partnership. Meanwhile, bilateral trade between Malaysia and India reached US$20.01 billion in the financial year 2023–2024.

These figures reinforce Malaysia’s strategic engagement with BRICS nations, particularly China and India, as it seeks to diversify trade and strengthen regional economic integration.

By aligning with BRICS, Malaysia envisions reducing tariff and non-tariff barriers, improving technology transfer, and advancing collaboration on digital infrastructure, renewable energy, and industrial innovation.

Furthermore, BRICS’ advocacy for a more equitable and multipolar global system resonates with Malaysia’s long-standing diplomatic principles.

As Chair of ASEAN in 2025, Malaysia has positioned itself as a voice for the Global South, promoting inclusive multilateralism and regional cooperation.

Participation in BRICS aligns with that broader vision. However, the economic and political benefits of BRICS alignment now risk being undercut by direct U.S. retaliation.

 

 

Trump’s Tariff Offensive: A Geopolitical Power Play

Trump’s tariff plan includes a 25% levy on Malaysian goods, signalling pressure on Malaysia for its growing ties with BRICS and perceived shift from U.S. alignment, alongside similar actions targeting other emerging economies.

These tariffs, which Trump described as adjustable “upward or downward depending on our relationship with your country,” send a strong message: economic engagement with BRICS or even perceived closeness to non-Western alliances will be met with economic punishment.

Malaysia, whose economy is tightly linked to the U.S. through exports of electronics, semiconductors, and machinery, is now under direct pressure.

Malaysia’s Balancing Act: Pragmatism Over Partisanship

Malaysia’s foreign policy has historically prioritized non-alignment, strategic neutrality, and multilateral cooperation.

As a founding member of ASEAN and an active participant in global trade frameworks like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), Malaysia has always sought to avoid being drawn into great power conflicts. Its outreach to BRICS is meant to complement not replace its existing Western partnerships.

However, the Trump administration’s increasingly binary approach to global alliances leaves little room for nuanced diplomacy. Countries are expected to “choose sides,” undermining the space for independent foreign policy, especially for middle powers like Malaysia.

Malaysia does not view BRICS as a geopolitical alliance in opposition to the West but rather as a pragmatic mechanism for development, trade diversification, and regional influence.

Its participation focuses on issues such as climate financing, smart infrastructure, and digital transformation areas of global concern that should not be seen as hostile to American interests.

ASEAN as a Diplomatic Buffer

In this tense environment, Malaysia’s role as ASEAN Chair could prove pivotal. ASEAN, with its consensus-based decision-making and commitment to neutrality, can serve as a stabilizing force amid intensifying geopolitical rivalry.

Malaysia has the opportunity to promote a framework where regional cooperation is not dictated by zero-sum choices but by shared developmental goals.

Through ASEAN, Malaysia can push for constructive dialogue between BRICS and non-BRICS countries in Southeast Asia.

It can champion an agenda centred on inclusive economic growth, sovereignty, and the avoidance of coercion principles that resonate with both Western and non-Western nations.

Economic Diversification and Resilience

Trump’s tariff ultimatum also exposes the vulnerabilities in Malaysia’s export-dependent economy. Malaysia must broaden its trade relationships, particularly across Asia, the Middle East, Africa, and Europe, to reduce reliance on any single partner.

Internally, investment in high-value industries such as advanced manufacturing, digital technology, green energy, and biotechnology will be critical. These sectors not only hold potential for long-term growth but also offer greater insulation from external shocks be it tariffs, sanctions, or global supply disruptions.

Ultimately, Malaysia’s engagement with BRICS is about expanding its strategic options, not choosing ideological sides. In an increasingly fragmented global order, middle powers like Malaysia must remain agile, assertive, and principled.

The challenge lies in defending national interests while avoiding entanglement in great power rivalries. Trump’s tariff threats may serve domestic political aims or be part of a broader strategy to reassert American primacy.

But for countries like Malaysia, they are a test of resilience, independence, and diplomatic skill. Success will depend not just on avoiding confrontation, but on shaping a foreign policy rooted in balance, development, and sovereignty.

In navigating this turbulent moment, Malaysia must continue to engage constructively with both the U.S. and BRICS, reinforce its commitment to multilateralism, and remain firm in its pursuit of a global order that allows for diversity, dialogue, and peaceful cooperation.

08.07.2025

Kuala Lumpur.

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https://www.malaysiakini.com/columns/748493

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