US tariffs will backfire on them, says Dr M

The former prime minister said US president Donald Trump ‘knows nothing’ about the rest of the world.

Former prime minister Dr Mahathir Mohamad said tariffs would drive up production costs in the US and make American goods more expensive.

KUALA LUMPUR:

 Former prime minister Dr Mahathir Mohamad says the wide-ranging tariffs imposed by the United States would backfire and hurt the US economy more than its trading partners.

The tariffs, ranging from 10% to 49% on about 60 countries, would trigger price increases for goods in the US, leading to higher living costs for its people, he said in an interview with FMT.

“We talk a lot about how this affects Malaysia and other trading partners of the US. But the question that should be asked is, what will happen to the US?”

“All goods in the US will go up in price and they will suffer from high living costs. Then their workers will demand higher wages. They will become uncompetitive,” he said.

He also said the US relied heavily on the global supply chain, especially for microchips from countries such as Korea, Taiwan, and Malaysia; the tariffs would raise production costs and make American goods more expensive.

Citing aviation as an example, he said countries like Malaysia could easily switch from buying American-made Boeing aircraft to European-made Airbus jets.

“For example, what if instead of buying 30 Boeing aircraft, we buy 30 Airbus. Each Boeing aircraft cost almost half a billion ringgit. Half a billion times 30, that’s what America is going to lose,” he said.

Last week, Mahathir said he expected the US to pause its tariff policy in the next three months, as the duties were damaging its own economy more than others.

The US has announced a 24% tariff on most Malaysian goods, among a range of tariffs on about 60 countries and a general 10% on imports from all countries. The tariffs have been paused for 90 days to allow for trade negotiations.

Mahathir also criticised the American worldview, saying many in the US regard their country as “the world” and remain largely ignorant about other nations.

“Even the US president knows nothing about the rest of the world. That’s why he is quarreling with other countries,” he added.

His comments follow anger in Malaysia over a putdown of China by conservative US commentator Bill O’Reilly, who said Malaysians have no money to buy Chinese products.

After Prime Minister Anwar Ibrahim hit back, calling O’Reilly a “colonialist” with a worldview rooted in imperialism, the US commentator mocked Anwar and doubled down on his claim that Malaysians had no money, citing the country’s low per capita income of US$5,731 compared to the US$42,220 per capita income of the US.

However communications minister Fahmi Fadzil, saying “ignorant O’Reilly” got his facts wrong, quoted World Bank figures showing Malaysia’s 2023 gross domestic product per capita at US$11,379, or US$36,416 when adjusted for purchasing power parity, placing the country among the upper middle-income nations. - FMT