Malaysia warned on Thursday that if the incoming Trump administration moves to impose tariffs on BRICS nations for pursuing a new currency or alternatives to the Dollar, it could disrupt the global semiconductor supply chain.

The BRICS bloc, originally comprising Brazil, Russia, India, and China, has expanded to include other nations.

Malaysia has expressed interest in joining the group, which seeks to counterbalance the Western-dominated global economic order, though its membership has not yet been finalised.

Trade Minister Tengku Zafrul Aziz stated that Malaysia was closely monitoring the situation after US President-elect Donald Trump threatened to impose 100% tariffs on BRICS countries unless they agreed not to create a new currency or support one that could replace the Dollar, Reuters reports.

Furthermore, Tengku Zafrul highlighted that the United States is Malaysia’s third-largest trading partner, and US companies are key investors in its semiconductor industry. Malaysia plays a significant role in the global chip supply chain, handling approximately 13% of global chip testing and packaging.

“As such, any move to impose a 100% tariff will only harm both parties which are depending on each other for efforts to prevent disruptions in the global supply chain,” he stated within a parliamentary reply.

He went on to add that although BRICS countries have discussed reducing their reliance on traditional trade currencies like the US Dollar, no official decision has been made regarding de-dollarisation efforts.

The group does not have a shared currency, but ongoing discussions on the topic have gained traction following the sanctions imposed by the West on Russia due to the war in Ukraine.

On Monday, Russia stated that any US attempt to force countries to use the Dollar would backfire, ultimately strengthening the push among nations to adopt national currencies for trade instead.