MALAYSIA is awaiting a response from the United States on industrial excess capacity, with the issue remaining the key outstanding matter in ongoing tariff discussions between the two countries, Investment, Trade and Industry (MITI) Minister Datuk Seri Johari Abdul Ghani said.
Johari said Malaysia had already resolved the forced-labour component of Washington’s concerns and would continue engaging the United States while protecting the interests of local businesses.
"We have finalised the forced-labour component. The issue of excess capacity has not been concluded yet," Johari said in his opening address at the Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) 80th annual general meeting on Sunday.
"We are waiting for a response and will provide an update once received."
The United States imposed an additional 10% tariff on nearly all Malaysian exports on July 24 following a Section 301 investigation into forced-labour allegations.
However, tariff rates arising from a separate US investigation into manufacturing excess capacity have yet to be determined.
The two countries had previously reached an Agreement on Reciprocal Trade, which includes commitments on labour protections and measures to address excess capacity in the steel sector.
Despite the tariff tensions, Johari said Malaysian exports to the United States continued to expand.
He cautioned, however, that Malaysia must ensure imports did not outpace exports and erode the country’s trade surplus.
Malaysia recorded a trade surplus of RM147.15 billion in the first six months of this year, already close to the RM151.80 billion recorded for the whole of last year.
Johari also urged Malaysian industries to be more selective in identifying sectors in which they could compete globally, given the scale, capital and government support available to major international rivals.
"We cannot aspire to become a global leader in every industry," he said. "If we produce 300,000 units and they produce three million, how do we compete?"
Rather than competing directly on scale, Johari said Malaysia should build on sectors where it already possessed established capabilities and develop strong industrial ecosystems around them.
"If we cannot be the champion, we build an ecosystem around them," he said.
He said the approach would allow Malaysian companies to capture greater value from global industry leaders through supply chains, technology transfers and support services.
Johari’s remarks point to a strategy of strengthening Malaysia’s existing industrial advantages while building deeper domestic ecosystems capable of supporting global companies and increasing local participation in international supply chains. - August 9, 2026
