Trump is imposing a 25% tax on imported vehicles, but Malaysia has it much worse.
The Trump administration has decided that a 25% tariff on foreign-built vehicles is the best way to “protect” American automakers. Let’s take a moment and reflect on our own protectionist measures, which are at a far more advanced level.
Trump’s plan is simple: slap a 25% tariff on cars built outside the U.S. starting April 2nd and hope this leads to a manufacturing renaissance. The administration claims this will generate $100 billion in revenue and create jobs. To sweeten the deal, they’re dangling a tax break for buyers of American-made cars, provided Congress plays along.
If Trump really wanted to see what full-throttle, no-apologies protectionism looks like, he should take a field trip to Malaysia. While America is fumbling with a simple 25% tariff, Malaysia has built an entire labyrinth of protectionist measures so convoluted that even the tax collectors might not fully understand how it works. Here, excise duties alone can range from 60% to a staggering 105%, depending on engine capacity and country of origin.
Malaysia’s taxation scheme doesn’t stop at simply bleeding consumers dry. No, that would be too easy. Instead, it features an elaborate web of “customized incentives” that are as transparent as a tinted Alphard window. These incentives, theoretically meant to attract investment, function more like a game of political roulette where the government gets to decide which car brands get to live happily ever after and which ones get taxed into oblivion.
EVs can be imported virtually free of taxes from countries that have minimal investment in Malaysia while brands that have built multiple factories here over decades are slapped with huge taxes. In a fair and open system, all brands would compete on a level playing field and investors would be more clear on what they were getting into. Plus, there would be fewer avenues for corruption.
But that would make too much sense. Instead, Malaysia’s approach ensures that the local automotive industry remains artificially propped up while consumers continue to pay absurd prices for vehicles that would be significantly cheaper anywhere else in the world. While Trump’s tariff tantrum is making headlines, Malaysia has been quietly perfecting the art of protectionism for decades. The key difference? Trump’s move is a clumsy, headline-grabbing policy that will likely backfire. Malaysia, on the other hand, has constructed a tax system so complex that it practically guarantees an eternal stranglehold on the market.
As the world watches these two vastly different but equally misguided approaches to automotive protectionism, one thing remains certain: consumers will pay the price. Whether it’s through artificially high import tariffs or an opaque taxation system that rewards political favoritism, the end result is the same—less competition, higher prices, and a lot of frustrated car buyers.
