KUALA LUMPUR, March 22 — Malaysia will hardly be affected by US President Donald Trump’s plan to impose trade sanctions on China, as its exports to America accounted for only one to two per cent of its total exports.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said, however, the trade sanctions would have a huge impact on other countries.

"We are concerned that this would trigger a trade war and China will (undertake) counter measure against the decision (made) by Trump.

"This is an unhealthy development, as we have a process established by the World Trade Organisation (WTO) which have to be complied with,” he told reporters after officiating the Showcase on Innovation for Productivity (SHIP) 2018 here, today.

Mustapa said that if trade retaliation were to take place, Malaysia’s solar manufacturing industry could be affected, as it is the world’s third largest producer of photovoltaic cells and modules, accounting for eight per cent of the global output.

He said Malaysia would call its counterparts in the US to discuss the matter.

News reports said that the White House would be announcing new tariffs on imports from China this week.

Meanwhile, Mustapa said that the increased benchmark interest rate by the US Federal Reserve (Fed) would not be disruptive from the Malaysian business point of view.

"It is a business decision... many have factored in the Fed’s decision as it has been gradually adjusted since the 2008 financial crisis,” he said.

The Fed yesterday announced a 0.25 hike in its interest rate to a target range of 1.5 to 1.75 per cent. — Bernama