US tariff

by SHAUQI WAHAB

MALAYSIA’S successful negotiation with the US hinged on a strategic zero-tariff commitment for 6,911 out of 11,260 tariff lines requested by Washington — covering 61% of the total — while preserving key exemptions for sensitive domestic sectors.

Investment, Trade and Industry (MITI) Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz (picture) said among the products that remain at 0% tariff are pharmaceuticals and semiconductors, while non-tariff issues such as sanitary standards and halal certification were addressed without compromising Malaysia’s religious or regulatory standards.

Among those new lines that will have a zero-duty import, 191 are for agriculture, while 1,347 lines are for the industrial sector.

“We’ve taken a thorough and methodical approach in deciding Malaysia’s final offer to the US, involving various agencies, ministries and industry stakeholders,” he said at a press conference today.

He noted that the recent tariff reduction announcement would help in stabilising bilateral trade relations amid increasing global protectionist pressures.

The revised tariff, which comes into effect on Aug 8, places Malaysia on equal footing with several ASEAN peers such as Indonesia, the Philippines, Thailand and Cambodia, which also face a 19% rate.

Tengku Zafrul added that the outcome reflects not just a diplomatic success, but also a strategic effort to protect key national interests.

“The reciprocal tariff rate of 19% is one that we feel is fair given the circumstances, and given vis-à-vis where our neighbours are and the global landscape,” he added.

The reduction came after a last-minute negotiation involving high-level engagement, including an early morning call between Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump, and follow-up discussions between MITI officials and US trade representatives.

Tengku Zafrul stressed that Cabinet approval was obtained to ensure Malaysia’s national policies and strategic sectors were not compromised.

Malaysia also stood its ground on several sensitive matters including excise duties on automobiles, tobacco and alcohol, foreign equity limits in strategic sectors and digital regulatory frameworks.

These red lines were maintained to protect local industries, including the national automotive sector which employs more than 700,000 Malaysians.

On the commercial front, Malaysia reaffirmed its commitment to purchase 60 Boeing Co’s aircraft worth nearly US$19 billion (RM80.56 billion) in two phases — part of a broader cooperation with the US seen to benefit both sides.

Tengku Zafrul urged Malaysian exporters to capitalise on the country’s 18 free trade agreements (FTAs) and diversify export markets in response to the new US tariff landscape.

A joint statement between MITI and the US Trade Representative (USTR) is expected to be released over the weekend, solidifying the terms.

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KUALA LUMPUR — The United States’ decision to reduce tariff on Malaysian exports to 19 per cent from 25 per cent is a significant achievement and stems from Malaysia’s thorough and methodical negotiating process, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz (picture).

Tengku Zafrul emphasised that Malaysia had stood firm on various “red line” items, and the 19 per cent tariff rate was secured without compromising the nation’s sovereign right to implement key policies supporting socio-economic stability and growth.

“This positive outcome follows sustained engagement between both governments through various bilateral platforms and reflects the high degree of Malaysia-US complementarity in trade and investment for over 60 years,” he said in a statement.

He also noted that the reduced rate is broadly in line with other Southeast Asian countries.

The Malaysia-US tariff negotiations started on May 6 and concluded on July 31, 2025.

Tengku Zafrul added that Investment, Trade and Industry Ministry (MITI) has been working closely with Bank Negara Malaysia to assess the impact of different tariff levels on Malaysia’s gross domestic product.

“In managing the impact of the 19 per cent tariff, MITI will continue to collaborate with relevant ministries and agencies to mitigate its effects on exports, encourage exporters to fully utilise Malaysia’s 18 free trade agreements, and further diversify and expand export markets. At the same time, we will continue implementing industrial reform programmes,” he said.

“This aligns with key national policies such as the New Industrial Master Plan 2030, the Green Investment Strategy, and the National Semiconductor Strategy, all of which are aimed at helping Malaysian companies transform operations by enhancing efficiency, embracing automation, and boosting overall productivity,” he added.

On the global economic outlook, he acknowledged that it has become increasingly uncertain since March 2025, driven by shifting trade policies, tariff uncertainties, and rising geopolitical tensions.

“As an open, trading economy, Malaysia’s growth prospects are closely linked to these external risks. Nonetheless, MITI has consistently emphasised that Malaysia is confronting these challenges from a position of strength and resilience, with robust domestic demand supported by ongoing policy measures and sustained industrial and economic reforms,” he said.

He also said that MITI and relevant ministries and agencies will conduct targeted outreach programmes in the coming months on the implementation of the revised tariff rate for Malaysian exports to the US market. — BERNAMA

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KUALA LUMPUR — Malaysia, along with four other ASEAN member states, is now subject to a 19 per cent tariff imposed by the United States (US) effective today.

According to a presidential order issued by the White House on July 31, the same tariff rate also applies to Cambodia, the Philippines, Thailand and Indonesia.

On July 7, Washington announced it would impose a 25 per cent tariff on all Malaysian products entering the country, separate from sectoral tariffs, effective Aug 1 this year — one percentage point higher than what was announced in April.

Meanwhile, Vietnam faces a slightly higher rate of 20 per cent, followed by Brunei at 25 per cent.

The US’s major trading partner, Singapore, continues to receive the lowest tariff among ASEAN nations at 10 per cent, unchanged since its initial implementation.

In contrast, Laos and Myanmar face the highest tariffs in the region, with both countries subject to a 40 per cent rate. — BERNAMA

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KUALA LUMPUR — United States (US) President Donald Trump will announce the tariff rate to be imposed on Malaysia latest by tomorrow, Prime Minister Datuk Seri Anwar Ibrahim (picture) said.

Anwar, who is also Finance Minister, announced that it was decided via a phone conversation with Trump at 6.50 am.

“We are also discussing the tariff issue on the spirit and principle of free trade. This also applies to the series of negotiations involving the Investment, Trade and Industry Ministry (MITI) with the US Trade Representative and Secretary of Commerce.

“We hope that (the tariff decision) will not burden our nation’s economy,” he said in his 13th Malaysia Plan (13MP) speech in Parliament today.

The US is scheduled to impose a 25 per cent import tariff on all Malaysian goods starting Aug 1, 2025.

Anwar said Trump also expressed his gratitude to Malaysia for playing an effective and outstanding role to resolve the Thailand-Cambodia conflict.

“In my response, I said this was due to the ASEAN consensus and the positive attitude of both countries as well as the cooperation shown by the US, especially Trump, and (China’s President) Xi Jinping,” he said. 

He said the US President also confirmed his attendance at the 47th ASEAN Summit to be held in Kuala Lumpur in October. — BERNAMA

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