THE Ministry of Investment, Trade and Industry (MITI) has welcomed the United States' decision to reduce its previously announced 25 percent retaliatory tariff on Malaysian exports to 19 per cent, effective 1 August 2025, following the conclusion of negotiations that began on 6 May.
The revised tariff brings the rate broadly in line with those applied to other Southeast Asian nations and was achieved without compromising Malaysia’s right to implement its own domestic socio-economic policies.
The outcome, MITI said, marks a significant milestone in Malaysia’s diplomatic and trade engagement with the United States, built over more than six decades of sustained cooperation.
“This decision by the United States underscores the enduring strength of our bilateral economic partnership,” said Minister of Investment, Trade and Industry Tengku Datuk Seri Utama Zafrul Abdul Aziz.
“It also affirms Malaysia’s credibility as a reliable trade and investment partner. We extend our appreciation to our counterparts in the US, particularly the Office of the US Trade Representative and the Department of Commerce, for their constructive collaboration throughout this process.”
MITI noted that it worked closely with agencies including Bank Negara Malaysia to evaluate the economic impact of the various tariff scenarios under discussion.
With the 19 percent rate now confirmed, MITI said it will continue efforts to shield Malaysian exporters from adverse effects through cross-agency coordination and strategic market support.
The ministry reiterated its focus on helping exporters fully utilise Malaysia’s 18 existing Free Trade Agreements, while driving forward key national policies such as the New Industrial Master Plan 2030, the National Semiconductor Strategy, and the Green Investment Strategy.
These initiatives, MITI said, are crucial in enabling businesses, especially small and medium-sized enterprises, to improve efficiency, embrace automation and remain competitive in a more demanding global trade environment.
Since March 2025, Malaysia has navigated rising global trade volatility, tariff unpredictability and heightened geopolitical tensions. As a highly open trading economy, Malaysia is sensitive to such shifts.
Nevertheless, MITI emphasised that the country has approached these challenges from a position of resilience, underpinned by firm domestic demand and ongoing economic reforms.
“MITI will continue to work with stakeholders to maximise opportunities arising from this latest tariff development,” Tengku Zafrul said.
“Our momentum remains strong, supported by consistently high implementation rates of approved investments, ongoing infrastructure projects, and high-impact national development initiatives.
“We are committed to defending Malaysia’s trade interests while fostering mutually beneficial partnerships with key economies, including the US. We will also pursue continued industrial reforms and market diversification to sustain national growth.”
MITI expressed its appreciation to all parties involved in the negotiation process, including Prime Minister Dato’ Sri Anwar Ibrahim, the Prime Minister’s Office, ministries and agencies, the American Malaysian Chamber of Commerce (AMCHAM), the US-ASEAN Business Council (USABC), and key representatives from think tanks and industry.
The ministry confirmed it will conduct targeted outreach and engagement programmes in the coming months to guide exporters on how to adapt to the new tariff regime.
The United States remains Malaysia’s largest export destination, with exports valued at RM198.65 billion. It is also the country’s leading source of approved foreign direct investment, totalling RM32.82 billion in 2024. - August 1, 2025
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