Chinese executives have been meeting top Malaysian officials to seek assurances they can avoid US tariffs if they relocate their battery, medical devices and semiconductor manufacturing to the country, the Financial Times reported on Tuesday.
The companies have asked Malaysian ministers and senior government officials to lobby against US imposing tariffs on products made or assembled in Malaysia by Chinese groups, the report said, citing three people familiar with the matter.
These moves come after the Biden administration last month unveiled steep tariff increases on an array of Chinese imports including electric vehicle (EV) batteries, computer chips and medical products. Some of the tariff hikes will take effect on Aug 1.
The Malaysian Prime Minister's office and the trade ministry did not immediately respond to a Reuters request for comment.
As the United States has intensified efforts to reduce trade with China by hiking tariffs, imports from Southeast Asian countries such as Vietnam, which relies on Chinese input for much of its exports, have surged.
Chinese companies such as solar panel maker Trina Solar have moved to boost manufacturing facilities in Vietnam and Thailand, which are not subject to the same duties, in a bid to evade the steep tariffs.
This has fuelled foreign investment from China, but there is uncertainty over whether the Biden administration will introduce new tariffs on Chinese-made goods in the region.