- The US Government announced new tariff rates on US$18bn worth of Chinese imports, citing the need to protect US industries from unfair competition. Such punitive moves offer Malaysian manufacturers the chance to have greater flexibility in stretching ASPs as the pricing gap narrows – not forgetting a potential demand shift from other customers to manufacturers here.
- - Read this at SGinvestors.io -
What is new?
- US Trade Representative Katherine Tai released a list of proposed strategic sectors (up to 14) that will be subjected to tariffs (or new tariffs imposed for certain products) ranging between 25% and 100%.
- - Read this at SGinvestors.io -
Opportunity to narrow the price gap.
- The current tariff structure imposed on Chinese glove makers:
- 7.5% on medical-grade gloves and
- 25% on industrial-grade gloves.
- After incorporating the 25% tariff, Chinese ASPs are set to increase to US$20-21.25/1,000 pieces from the current US$16-17. This could essentially narrow the price gap between Malaysia-made products, which now sell at US$20 and are not subject to US import tariffs.
Tariff to be effective in 2026.
- Read more at SGinvestors.io.
Oong Chun Sung RHB Securities Research | Singapore Research RHB Invest | https://www.rhbgroup.com/ 2024-05-15
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