Malaysia Warns Chinese Firms Of 'Bypass Export'"Don't Use U.S. Tariff Avoidance"

Malaysia has warned against using the country as a means of dodging U.S. tariffs against Chinese companies as the U.S. tightens trade restrictions against Southeast Asian countries to prevent China's bypass exports.

"Over the past year, we have advised several Chinese companies not to invest in Malaysia if they only intend to rebrand their products through Malaysia to avoid U.S. tariffs," Liu Chin-tong, Malaysia's deputy minister of investment, trade and industry, said during a local event, according to Reuters.

Liu did not specify which Chinese company it was.

Rio also predicted that the U.S. administration, like in the solar panel sector, will impose tariffs in the future regardless of whether it is Democrats or Republicans.

Earlier in May, the Biden administration decided to end temporary tariff exemptions on solar panels produced in Malaysia, Thailand, Vietnam and Cambodia to prevent bypass exports of Chinese solar products through Southeast Asia.

In October, the U.S. Department of Commerce decided preliminarily to impose countervailing duties on solar cells imported from these four countries.

The Biden administration will also tighten restrictions on exports of semiconductor manufacturing equipment, while preventing products from Malaysia and South Korea, Singapore, Taiwan and Israel from supplying them to Chinese companies, Reuters said.

Malaysia is the world's fifth-largest exporter of semiconductors, accounting for 13% of the semiconductor post-processing market, including assembly, testing and packaging (ATP).

On top of that, it is expected to be even worse for Malaysia, where Trump threatens to join the BRCIS with a "100% tariff" card.