THE Malaysia-United States Reciprocal Trade Agreement (ART) is expected to have a substantial influence on Penang’s economy, particularly in its halal sector, electronics and electrical (E&E) industry, foreign direct investment, and small and medium enterprises (SMEs).
Penang Chief Minister Chow Kon Yeow said that while the full impact of ART on the state is still under review, the agreement presents significant opportunities for local halal producers to access the US market through tariff-free trade.
“SMEs in the state’s halal sector have the potential to become strategic partners with US companies in high-tech industries while benefiting from more competitive export costs,” Chow said.
He noted that the agreement could elevate exports and strengthen the position of local halal players in high-value global supply chains.
The state government is examining measures to reinforce the halal ecosystem, including enhancing enforcement and branding by the Department of Islamic Development Malaysia (Jakim), increasing automation for halal SMEs, and exploring new markets in the Middle East and ASEAN through trade missions, Chow added.
Chow emphasised that Penang’s halal sector, especially in ready-to-eat food and processing, has high growth potential, although challenges such as regulatory compliance and global competitiveness remain.
The ART is also expected to broaden market access for Penang’s E&E sector, attract additional foreign investment, and generate high-skilled employment. “It also encourages the development of the local workforce through technical training programmes,” he said.
However, Chow acknowledged that the agreement brings challenges for SMEs, the agricultural sector, and halal industries.
The state government has introduced empowerment programmes through the Portfolio of Trade, Entrepreneurship Development and Rural Affairs, including microcredit schemes, equipment assistance, and skills training for small entrepreneurs.
For agriculture, the agreement is projected to benefit commodities such as natural rubber, palm oil, and other produce, though Penang is not a major producer.
“The state can develop through innovative agricultural products, value addition, and access to premium markets,” Chow said.
To mitigate risks, the state is reviewing policies linked to ART to safeguard Penang’s economic and social interests.
Efforts to strengthen economic resilience continue through InvestPenang, including upgrading industrial infrastructure, streamlining regulatory and business processes, and reducing operational costs to attract and retain investors.
“The state government is committed to ensuring Penang remains a strategic player in the global supply chain, with direct benefits for citizens and the entrepreneurial community,” Chow added. - November 18, 2025
