KUALA LUMPUR— Malaysia could be affected if US president-elect Donald Trump delivers on his campaign pledges to review trade ties with Asia, the United Overseas Bank (UOB) said today.

UOB economist Julia Goh said while Malaysia’s balance of trade with the world’s most powerful military nation was marginal, changes to US policy with the larger trading nations could have a knock-on effect.

“It’s really countries like China, Korea and Japan that have larger trade surpluses, and so hence if Trump is true to his words, these are the countries that he would be targeting with potential tariffs.

“Of course Asean and Malaysia would feel its indirect effects,” she said during a briefing today.

Trump stunned pundits by winning the tight race against Democratic Party candidate Hillary Clinton, who was both the favourite and seen as more market-friendly.

The ringgit traded at 4.2500/2550 at 9am today against the greenback, down from 4.2240/2300 yesterday.

Goh said it was hard to predict the precise impact of a Trump presidency as his trade policies remain unclear.

The election upset, dubbed one of the biggest in US political history, could also exacerbate the volatility in Europe as the mogul’s victory could resonate and energise right wing and anti-establishment political movements across the Atlantic, which could undo existing trade ties there.

This could provide more external uncertainties, Goh said.

“We are seeing a shift in sentiment towards more anti-establishment especially at the heels of Brexit… probably the next thing to watch is the elections that are coming throughout Europe.”

Notwithstanding the development in the US, UOB forecast the Malaysian economy to grow at 4.5 per cent in 2017 on the back of domestic spending.

It noted that the large inflow of foreign direct investments resulting from the many infrastructure projects over the next five years.

Gross FDI rose 3.2 per cent year on year to RM67.7 billion in the first half of 2016.

Interest rates in the region is also expected to remain low as external risks from political volatility in Europe and the US persists, which could help boost domestic spending Goh said.