Malaysia has briefed China on its trade deal with the US, assuring its strategic partner that the agreement will not burden bilateral trade relations.
KUALA LUMPUR: Malaysia has sent a delegation to China to provide information and clarification regarding the Agreement on Reciprocal Trade (ART) with the United States.
Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz said the delegation met with China’s Ministry of Commerce last week after the country expressed concerns about the geopolitical implications of the pact.
“They said they needed to put this on record because of the geopolitical issues,” he said during the committee-level debate on the Supply Bill 2026 in the Dewan Rakyat.
He added that China wanted assurance that the ART would not burden the trade relationship between the two strategic partners.
The discussions also led to efforts to further strengthen trade cooperation through a new memorandum of understanding.
Tengku Zafrul stressed that Malaysia moved quickly on the ART because its export structure is highly exposed to US tariffs.
He revealed a discussion with the US Trade Representative, who indicated Malaysia would receive favourable treatment, especially in the electrical and electronics and semiconductor sectors.
The minister said Malaysia negotiated under the threat of a new 25% tariff on almost all exports to the US.
Without the ART, he warned Malaysia’s GDP growth could decline by around 1.2 percentage points or almost RM30 billion per year.
“I would rather be criticised for moving quickly to save factories and people’s jobs than be praised for daring to fight but letting the 25% tariff be levied without any umbrella,” he said.
Tengku Zafrul also dismissed claims that the ART affected the position of bumiputera rights.
He clarified that Article 7.1 of the ART recognises Malaysia’s rights and obligations in the World Trade Organization.
The agreement can also be terminated with written notice after 180 days, as provided for in Article 7.5.
