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After Trump tariffs, Malaysia gloves could be priced out in non-US markets

by Yurie Miyazawa
in Leadership
After Trump tariffs, Malaysia gloves could be priced out in non-US markets
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[SINGAPORE] Glove makers in Malaysia are more likely to weather the tariff-induced storm as the duties imposed on the country’s exports to the United States are lower than other glove-producing Asian markets, said analysts and manufacturers.

These uneven tariffs are likely to widen the price differential in the US between Chinese and Malaysian gloves, making the former more expensive, which augurs well for the latter. However, market watchers cautioned that competitors could channel their excess inventory to non-US markets such as Europe, driving down average selling prices there.

US President Donald Trump on Apr 2 imposed sweeping tariffs on imports to the US, with different duties on each country.

Malaysia received a 24 per cent reciprocal tariff, while China was slapped with 34 per cent – on top of an initial 20 per cent imposed earlier. Other glove-producing Asean countries – Thailand, Vietnam and Indonesia – were handed duties between 32 and 46 per cent.

While Malaysia had the lowest duties among the five, stocks of the country’s glove makers have been battered in a widespread market meltdown.

Since Apr 3, rubber glove maker Top Glove, listed in Singapore and Malaysia, has fallen 2 per cent on the Singapore Exchange to S$0.25, and 3 per cent on Bursa Malaysia to RM0.82. Cleanroom glove manufacturer Riverstone dived 8.6 per cent to S$0.845.

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Glove makers listed in Malaysia also fared poorly. Hartalega has retreated 2 per cent to RM1.98 and Kossan Rubber Industries has declined 3.9 per cent to RM1.73.

“Relatively favourable”

Despite the negative investor sentiment, Malaysia’s glove manufacturers are largely benign on the tariff news.

Riverstone’s executive chair and chief executive Wong Teek Son told The Business Times that US buyers have primarily been sourcing their gloves from Malaysia since the end of 2024.

This likely came after the Office of the US Trade Representative announced in September last year that there will be a steep tariff hike of 50 per cent in 2025 and 100 per cent in 2026 for Chinese-made medical and surgical gloves, from 7.5 per cent in 2024.

“The high tariffs imposed on Thailand and Indonesia may further benefit Malaysian glove manufacturers,” he added. Riverstone exports 20 per cent of its cleanroom gloves and 70 per cent of its healthcare gloves to the US.

While Riverstone has a production plant in China, the products there are supplied only to its domestic market, and will not be affected by the tariffs.

Meanwhile, Top Glove said the 24 per cent tariff is “relatively favourable” compared with peers.

“As the US accounts for about 25 per cent of Top Glove’s global export sales, we believe this will generally augur well for the company,” said Top Glove in a press statement, adding that it will continue to monitor the situation.

The group also “anticipates increased competition in non-US markets, particularly Europe, as global trade dynamics shift”.

Analysts note that Malaysian glove makers will have some edge in the US market, but could be priced out in non-US markets on a possible flood of Chinese gloves.

CGS International analyst Jeremy Goh said Chinese gloves becoming more expensive in the US may be positive for players such as Hartalega, as it has significant US exposure.

AmInvestment Bank analyst Paul Yap said: “With the reciprocal tariff in place, Malaysian glove makers gain a US$1 to US$4 per carton edge over regional rivals such as Thailand, Vietnam, and Indonesia, assuming equal production costs.”

That said, US buyers have been diversifying sourcing, reducing reliance on any single country post-pandemic, he said.

“At the same time, a glove supply glut and Chinese manufacturers expanding beyond China continue to weigh on the sector,” he added. “Even with a price advantage, margins will stay squeezed.”

Tags: GlovesMalaysiaMarketsnonUSpricedTariffsTrump
Yurie Miyazawa

Yurie Miyazawa

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