ISSN: 2226-3624
Open access
This study investigates the potential economic impact of the United States' decision to raise import tariffs on Malaysian palm oil from 10% to 19%, effective August 1, 2025. Utilizing scenario-based forecasting and univariate time-series models, the analysis evaluates Malaysia’s palm oil export value and the corresponding U.S. import value from 1989 to 2024, with forecasts extending through 2030. Two scenarios are simulated: a baseline scenario assuming the continuation of a 10% tariff and a shock scenario reflecting the 19% tariff hike. The results indicate significant projected revenue losses under the shock scenario—approximately USD 434,950 in export earnings and USD 2.69 million in U.S. import value over the six-year forecast period. These findings highlight the vulnerability of Malaysia’s palm oil industry to protectionist trade policies and emphasize the need for strategic diversification, value-added export development, and proactive trade diplomacy. The study contributes empirical evidence to inform policy decisions in the face of external trade shocks.
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