TARIFFS are taxes imposed by a country on imported goods entering its domestic market.
The main objective is to increase the price of foreign goods, making local products appear more competitive.
In Malaysia, for example, tariffs are imposed on imported vehicles such as those from Honda, Toyota, and Mercedes, making them more expensive compared to local cars like Proton and Perodua.
However, the recent tariff hikes announced by the United States under President Donald Trump’s leadership have had a different impact on global trade.
Nobel Prize-winning economist Paul Krugman has criticised the methodology behind these tariffs, calling them “completely insane.”
Trump has imposed tariffs on foreign goods, including those from Malaysia, at a rate of approximately 24 per cent.
Although this rate is the fourth lowest in Southeast Asia, it still affects Malaysia, as Malaysian products become more expensive in the US market, potentially leading to a decline in export demand.
In facing such challenges, Islam teaches its followers to remain positive and to view trials as opportunities for self-improvement.
Allah SWT says in Surah At-Tawbah, verse 51:”Say: Nothing will ever befall us except what Allah has destined for us. He is our Protector, so in Allah let the believers put their trust.”
This verse reminds us that every test is divinely ordained, and within hardship lies opportunity.
In this context, Trump’s tariff imposition should not only be seen as an obstacle but also as a chance for Malaysia to strengthen its economic sectors.
Renowned Islamic scholar Imam al-Ghazali, in his work Ihya’ Ulumuddin, emphasised that economic strength is one of the pillars of a resilient ummah.
He also noted that economic stability leads to social stability and moral integrity within society.
Hence, in response to these tariffs, Malaysia must strengthen its internal economic policies and expand employment opportunities for its citizens.
One opportunity arising from this situation is Malaysia’s potential to become an alternative investment destination.
Neighbouring countries such as Cambodia, Laos, Vietnam, Thailand, and Indonesia face higher tariffs ranging from 32 per cent to 49 per cent.
This makes it more difficult for them to export goods to the US at competitive prices.
For example, if a product from Cambodia is priced at $100 and is subject to a 49 per cent tariff, the price would rise to $149.
This gives Malaysia an edge in attracting multinational companies from these countries to relocate their operations here, as Malaysia faces a lower 24 per cent tariff and offers lower property costs and provides a sufficiently skilled workforce.
Nevertheless, Islam insists that any economic effort must not ignore social justice.
Allah says in Surah Al-Baqarah, verse 286: “Allah does not burden any human being with more than he is well able to bear.”
This verse calls on governments and industries to uphold workers’ rights, ensure fair wages, and provide safe and dignified working environments.
If Malaysia succeeds in attracting more foreign investments and creates thousands of new job opportunities, it would be a form of sustenance that deserves gratitude.
According to Islamic economic thinker Prof. Dr. Muhammad Umer Chapra from the Islamic Research and Training Institute (IRTI), economic policies must align with the objectives of maqasid syariah such as justice, transparency, and social responsibility.
Malaysia’s strategy to attract foreign investment and expand job opportunities must ultimately aim to ensure public welfare, social justice, and sustainable development.
Therefore, in addressing the impact of these tariffs, Malaysia must adopt an approach that is not only pragmatic but also ethical.
This includes capitalising on potential in the digital economy, green technology, and technical skills development through the TVET system, so that we can build an economy that is globally competitive, resilient, and self-reliant.
Additionally, Malaysia must not remain passive on this issue. Strategic diplomatic engagement with the US must be renewed, especially in resolving matters such as halal certification, automotive restrictions, and digital regulations in a transparent and professional manner.
Simultaneously, alternative markets in the Middle East, Africa, and ASEAN should be explored to avoid overdependence on a single economic superpower.
As the proverb goes, “Don’t put all your eggs in one basket.”
Despite the challenges ahead, including competition from neighbouring countries also vying to attract foreign investment, Malaysia must leverage its unique strengths.
These include not only lower tariff rates but also political stability, business-friendly economic policies, and a strategic geographic location.
The Trump tariff policy poses both challenges and opportunities.
From an Islamic economic perspective, we are taught to view every hardship as a chance to improve and uplift society.
Therefore, Malaysia should seize this opportunity to strengthen domestic industries and create more job opportunities for the future.
At the same time, all plans and efforts must be carried out justly and for the benefit of society, in line with maqasid syariah principles that emphasise justice and social well-being.
Guided by these principles and a vision for a sustainable economy, Malaysia can not only weather this storm but also emerge stronger, fairer, and more independent.
The writer is a senior lecturer at the Islamic and Philosophy Studies Unit, School of Languages, Civilisation and Philosophy, Universiti Utara Malaysia.
