Fitch Solutions: Medical devices industry to gain from trade war

KUALA LUMPUR: Fitch Solutions Macro Research expects Malaysia’s medical devices industry, including gloves, to benefit from the increasingly acrimonious trade war between the US and China.

In a statement yesterday, it said Malaysia can be used as an alternative manufacturing base for both the US and Chinese markets.

“In the short term, Malaysian rubber glove manufacturers will likely benefit from the recent US tariffs imposed on Chinese medical gloves.

“In the longer term, additional tariffs on a broad range of medical devices imposed by both China and the US could help drive direct foreign investment into Malaysia, boosting its international competitiveness, ” it said.

Recent moves by the US government to further ramp up tariffs on Chinese-made products will increase pressure for Chinese companies targeting the US market to relocate manufacturing operations.

It pointed out Malaysia’s unhindered access to the US market and other major world markets increases its attractiveness as an alternative manufacturing base.

It said initially, Malaysian rubber glove manufacturers stand to benefit from the recent US tariffs imposed on Chinese medical gloves.

The US government had imposed a 15% tariff on medical gloves made in China from Sept 1. Hence, US importers had been seeking alternative sources of supply from other manufacturers in Asia.

“As the world’s largest producer of rubber gloves, Malaysia stands to benefit from this shift in supply chain, ” it said.