Based on above in 2016 total exports are usd18893

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Based on above, in 2016 total exports are USD188.93 billion while total imports are USD167.95 billion so that Malaysia creates trade surplus in this year. Next, in 2017 total exports also higher than total imports such as USD224.74 billion more than USD201.06 billion so that it also called trade surplus. Its shows Malaysia not depended on others countries. 5.0 ISSUES OF TRADE WAR BETWEEN CHINA AND UNITED STATE WHICH AFFECTED MALAYSIA. China is the most important trading partner for Malaysia before the United States. According to data released by the Malaysian Bureau of Statistics, the bilateral import and export volume of goods between Malaysia and China was $67.75 billion in 2017, up 16.6 percent. Besides, US was the third largest country which contributed 9.5 percent or RM88.7 billion of total Malaysia export. Unfortunately, a trade war happened between these two countries. More and less this situation affected Malaysia export and import. They keep imposing a lot of tariffs on goods traded between them. US President, Donald Trump accused that China was violating their intellectual rights. China with its advantage of technology produced a ‘counterfeit’ product or artificial product. They violated the US intellectual right with producing a product that is based 15
on originally brands from the US with a slightly cheaper than US but in low quality. This product will be exported to the most including Malaysia. Trump was unsatisfied that his country is flooded with China import goods. This situation created a surplus because more on the import side compared to the export of the US. However, the situation getting more tighter due to China President, Xi Jinping did not execute any action or reducing the surplus. This situation affected Malaysia whether in a direct and indirect way. The imposed tariff which affects Malaysia export to the US was significant for products such as solar panels, washing machine, steel, and aluminium. The included export to the US only represented 0.8 per cent out of total export in 2017. However, the indirect impact on Malaysia export regarding the imposed tariff was much higher. Most of the product is electric and electronic (E&E), office machine and automatic data processing tools. Other products including fuel and crude oil, metal ores, mining product, chemicals, plastic, and rubber. Almost 50 per cent out of Malaysia export was the input or intermediate product for the final goods of China which then exported to the US. At the same time, firms will reduce their production which then will be exported to the US due to the increment of a tariff. The demand for the component that is produced in Malaysia will be declined. Malaysia export was expected to be reduced up to 0.08 per cent while GDP was reduced up to 0.02 per cent from 2018 to 2020. If this trade war getting much tighter and affect global production with 0.4 per cent in 2020, Malaysia economy was expected to decline up to 0.7 per cent. This assumption is based on econometric analysis which shows a reduction of 10 percent in global growth will reduce Malaysia GDP to 14 percent. However, due to the low invention and

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