Malaysia Eyes Anti-Dumping Measures Amidst Rising Cheap Steel Imports
As international trade dynamics shift, Malaysia is closely monitoring the potential influx of cheap steel imports, particularly in the aftermath of the US's imposition of tariffs on steel and aluminum. According to the Ministry of Investment, Trade and Industry, if evidence of dumping, the practice of selling products at unfairly low prices in foreign markets, is found to harm the domestic steel industry, Malaysia may implement anti-dumping measures to mitigate these trade distortions.
The ministry clarified that if dumping causes injury to local businesses, steps such as anti-dumping tariffs could be imposed to ensure a level playing field for domestic producers. Additionally, if there is a surge in imports, trade remedy measures like safeguards could be applied as temporary solutions. These would give Malaysian industries time to adjust and remain competitive in the face of increased competition from cheap imports.
Impact of US Tariffs on Malaysia's Steel Market
The United States recently raised steel and aluminum tariffs from 10% to 25% on most imports, including from countries that previously enjoyed tariff exemptions. This shift has raised concerns in various nations, including Malaysia, about potential trade diversion, where products originally intended for the US market might be redirected to other countries, including Malaysia. However, Miti Minister Tengku Datuk Seri Zafrul Abdul Aziz has stated that the impact of these US tariffs on Malaysia’s steel exports is relatively minimal, citing that only RM2.45 billion worth of iron and steel products were exported to the US in 2024, accounting for just 1.2% of Malaysia’s total exports to the US.
Moratorium on New Steel and Aluminum Plants in Malaysia
To counteract the pressure on local industries from cheap imports, Miti had implemented a moratorium in August 2023. This moratorium temporarily halts the development of new plants or the expansion of existing steel and aluminum production facilities in Malaysia. Tengku Zafrul emphasized that without this policy, the local steel industry would likely have been unable to survive the impact of the flood of cheap imports, particularly from China and other low-cost producers. This moratorium underscores the government's commitment to ensuring the sustainability of key industries, including steel and aluminum.
Concerns Over Trade Diversion and Industry Support
The Malaysian Iron and Steel Industry Federation has expressed concerns that the US tariffs could cause a flood of steel products into the Malaysian market, further exacerbating the issue of trade diversion. MISIF has called on the government to strengthen anti-dumping measures to prevent the injury of local businesses due to unfair competition.
In response to these concerns, Miti has launched an investigation into the potential dumping of flat-rolled steel products from countries like China, South Korea, and Vietnam. This probe comes on the heels of a similar investigation earlier in the year, where anti-dumping duties were expanded on certain steel wires from China. However, the outcome of the current investigation remains to be seen.
Global Trade and Tariff Implications
The US’s new tariff policy, which applies a flat 25% duty on steel and aluminum imports from a wide range of countries, has been controversial. Prior to this increase, some countries, including Canada, Brazil, and South Korea, had been exempt from such tariffs under specific agreements or product exclusions. With these carve-outs now removed, global steel producers are exploring new markets for their products, which could lead to further import surges in countries like Malaysia.
Other nations are also taking action in response to global steel market shifts. For instance, in January 2025, Vietnam imposed anti-dumping duties on certain steel wire products from China, Malaysia, and Thailand. Similarly, Indonesia introduced tariffs on select iron products from China, South Korea, and Taiwan in October 2024. These moves highlight a broader regional trend of safeguarding domestic industries against what is perceived as unfair competition in the steel market.
Safeguarding Malaysia’s Steel Industry
The Malaysian government, through Miti, is actively working to ensure that its steel industry remains resilient and competitive, despite the challenges posed by global trade disruptions and the influx of cheap imports. By employing anti-dumping measures and safeguard mechanisms, Malaysia hopes to protect its local businesses from unfair trade practices and maintain the integrity of its strategic industries.
With continued investigations into steel dumping and trade policy adjustments, the outcome will be crucial for determining the future of Malaysia’s steel production sector and its broader role in the global steel market.
