Page 18 - FDMAsia JulAug 2025

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ITTO TROPICAL TIMBER MARKET REPORT

Even with positive developments in trade talks between Asian countries and the US, the
region’s economy continues to reel from the impact of the initial shock of the US tariffs. As the
industry navigates through the uncertainties, ITTO tells us more about the latest happenings
around the globe.

MALAYSIA “The key question now is whether market share will shift
Looming demand shock from the US tariffs due to relative price changes stemming from the varying tariff
Economists recommend Malaysia should urgently rethink its levels with countries with lower tariffs potentially gaining a
strategy to secure a trade deal with the US to avoid a long- competitive edge” said Yeah.
term economic fallout. Malaysian Furniture Council president, Desmond Tan, said
They warn of a looming demand shock from the US tariffs and Vietnam, Malaysia’s closest competitor in the global furniture
urge policymakers to reassess their approach, including boosting market, produces a similar range of products and targets the

imports from the United States and addressing non-tariff barriers. same export destinations, especially the US.
The US tariff on imports from Malaysia was increased to Tan said the industry is also being squeezed by rising costs
25 percent, up from 24 percent, effective 1 August. on the domestic front. “These include the expanded Sales
Sunway University economics professor and government and Service Tax (SST), which now imposes a five percent
adviser, Yeah Kim Leng, said Malaysian exporters, particularly tax on raw materials and directly drives up production costs.
in US-exposed sectors, could see reduced orders as American We also face higher labour expenses with the new minimum
buyers cut back purchases. wage” he added.

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