Malaysia says 19% US tariff outcome achieved without compromising its sovereign rights
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The US ran a goods trade deficit with Malaysia of US$24.8 billion (S$32.2 billion) in 2024, data from the Office of the US Trade Representative showed.
PHOTO: REUTERS
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KUALA LUMPUR – The revised tariff rate imposed by the United States on Malaysia was achieved without compromising the nation’s sovereign rights after it stood firm on various “red line” issues, Malaysia’s Investment, Trade and Industry Ministry said on Aug 1.
The positive outcome of the US tariff talks follows sustained engagement between both governments and is a significant achievement of Malaysia’s thorough and methodical negotiating process, the ministry said in a statement.
US President Donald Trump will impose a 19 per cent tariff on exports from Malaysia to the US, a lower rate than the 25 per cent he threatened in July.
The figure was set in an executive order that he signed on July 31, ahead of an Aug 1 deadline he imposed for countries to negotiate trade frameworks with his administration.
“We will continue to work closely with relevant ministries, agencies, to find ways to mitigate the impact of tariffs on Malaysia’s exports,” the ministry said.
The South-east Asian nation has been attempting to win favour with Mr Trump, including by cracking down on the smuggling of advanced semiconductors through Malaysia and helping to broker a ceasefire between Thailand and Cambodia.
Malaysian Prime Minister Anwar Ibrahim’s government wanted to secure a tariff rate below 20 per cent,
Datuk Seri Anwar had previewed the announcement on July 31, when he referenced a telephone conversation with Mr Trump and said the US leader would announce a tariff rate on Aug 1, Malaysian time.
In his address, Mr Anwar also said Mr Trump had thanked Malaysia for its role in helping to mediate the recent conflict between Cambodia and Thailand over their shared border.
Malaysia’s Investment, Trade and Industry Minister Tengku Zafrul Aziz had said previously that there were several “red lines” the government would not cross in trade negotiations – such as sacrificing the country’s sovereignty or sidelining other trade partners – as it sought to close a deal with the US.
The tariffs are set to weigh on the economy, with the central bank this week cutting its growth forecast range to 4 per cent to 4.8 per cent, from 4.5 per cent to 5.5 per cent, amid the uncertainty.
Datuk Seri Zafrul had earlier warned that the US levies would affect the economy for years to come. At the same time, the Trump administration wants the country to address trade imbalances and non-tariff barriers, and to safeguard US technology from being channelled to other parties.
The US ran a goods trade deficit with Malaysia of US$24.8 billion (S$32.2 billion) in 2024, data from the Office of the US Trade Representative showed. It was also the top foreign investor in Malaysia in 2024. Bloomberg
