MALAYSIA has successfully concluded trade negotiations with the United States, securing a reduction in retaliatory tariffs from 25 per cent to 19 per cent, effective 1 August 2025 — a diplomatic outcome achieved without compromising national sovereignty or domestic industry.
Minister of Investment, Trade and Industry (MITI) Tengku Zafrul Abdul Aziz clarified that key sectors such as semiconductors and pharmaceuticals remain unaffected by the tariff adjustments, with exports to the US continuing to enjoy zero-tariff access.
“The semiconductor and pharmaceutical industries are not affected by recent tariff negotiations, and imports to the United States remain at zero tariff,” he said on Friday.
Tengku Zafrul also confirmed that 6,911 tariff lines — or 61 per cent of the 11,260 lines requested by the US — will now enjoy zero tariffs under the agreement. The outcome, he noted, reflects a careful and strategic approach by Malaysia’s negotiating team.
“This is a systematic and methodical approach to determine our final offer to the United States and we’ve made a comprehensive offer that covers 98 per cent of all tariff lines but have only agreed to liberalise 61 per cent,” he explained.
He strongly refuted allegations that Malaysia had compromised its halal standards or agreed to an exclusive supply of rare earth elements (REE) to the United States in exchange for the tariff cut.
“We did not lower halal standards to secure lower tariffs. All halal imports from the United States must still comply with the standards set by JAKIM,” he said.
On the issue of rare earths, Tengku Zafrul added: “This was never raised during tariff negotiations. The US simply requested that Malaysia not impose export restrictions. At present, there are no such restrictions on processed REE exports.”
As for the reduced tariff lines, Malaysia agreed to lower duties on selected products which do not threaten the competitiveness of local industries.
“These are win-win outcomes for both sides,” he said, adding that negotiations, which began on 6 May 2025, were conducted with transparency and mutual respect.
He also extended gratitude to all involved, particularly the MITI negotiation team, affectionately referred to as “Team Owl”, for their commitment during long overnight discussions due to time zone differences.
“This achievement reflects confidence in Malaysia as a principled and strategic trade partner, especially in critical sectors such as semiconductors,” said Tengku Zafrul. “It eases pressure on our exporters and creates new opportunities for local businesses to expand globally.” - August 2, 2025
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