Trump’s Tariffs Impede Malaysia’s Plan to Prepare for A.I.

The Intel factory is in the same neighborhood as the one set up by AMD, a rival chipmaker. A quick drive away is a plant built by HP. They are all part of a large thicket of buildings that evokes Silicon Valley but is in Malaysia.

American companies started opening manufacturing facilities in Malaysia’s Penang State over five decades ago. The partnership has created tens of thousands of jobs and been a lucrative industry for Malaysia, which has become a crucial cog in the global tech manufacturing industry. It is one of the biggest sources of semiconductors exported to the United States, sending billions of dollars of components used in laptops, phones, cars, toys and medical devices.

Now, like so many places that have prospered thanks to international trade, Malaysia is caught in the cross-hairs of President Trump’s tariffs.

Until recently, Malaysia was seen as a beneficiary of Washington’s desire to keep advanced chips for artificial intelligence out of China’s hands. The thinking was that companies could insulate themselves from the intensifying U.S.-China rivalry by moving operations to Malaysia. The hopes were so high that last year, Prime Minister Anwar Ibrahim set an ambitious goal to prepare Malaysia to build high-tech chips used in A.I. He laid out a decadelong, multibillion-dollar plan to move Malaysia from assembling and testing semiconductors into chip design and cutting-edge manufacturing, akin to Taiwan.

This plan could be undermined by Mr. Trump’s chaotic trade policy, which has left the industry guessing. Last month, his administration imposed a 24 percent levy on all Malaysian exports to the United States. Those tariffs were soon put on hold. The two countries are in negotiations — the status of which is unclear — but all Malaysian goods are subject to a 10 percent base-line tariff Mr. Trump has imposed.

But the president has said that he is also considering a blanket levy of at least 25 percent on all semiconductor imports, arguing that these imports could threaten U.S. national security. He appears committed to trying to move more chip manufacturing back to the United States, said Julia Goh, a senior economist with UOB, a regional bank based in Singapore.