KUALA LUMPUR: Malaysia remains optimistic that ongoing negotiations with the United States over a proposed 25% import tariff on Malaysian goods can yield a positive outcome before the Aug 1 deadline, said Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
He said Malaysia had entered the talks in good faith, with more than 25 formal engagements held with US counterparts over the past 90 days.
“We are still engaging, and both sides are talking — that alone is a good sign.
“We want a fair and comprehensive agreement that benefits Malaysia, our companies and our people.
“But if the deal does not benefit us, we should not have a deal. We have to be firm on that,” he told a press conference at the Ministry of Investment, Trade and Industry (Miti) today.
Tengku Zafrul reiterated that while Malaysia is willing to compromise on certain matters, there are “red lines” that cannot be crossed — including digital tax sovereignty, government procurement policies, and halal certification standards.
“We cannot compromise when it comes to the sovereignty of the country.
“There are laws that we believe are important for Malaysia, including our right to impose a digital tax, our procurement policy and public health standards.”
Zafrul said Malaysia has already made substantial offers to improve market access for US products, particularly in the sectors of industrial goods, agriculture, and semiconductors.
He also noted that Malaysia’s trade surplus with the US has been declining since 2019.
Despite the short window remaining, Zafrul said there was still room for diplomacy.
“This is not yet effective. We still have time before Aug 1.
“The fact that the US is still willing to engage shows that there’s still space to work things out.”
He added that further high-level engagements — including with the US Secretary of State — are expected in the coming days.
On Monday, US President Donald Trump announced the updated tariff via a letter to Anwar, shared on his Truth Social platform.
He cited Malaysia’s “tariff, non-tariff policies, and trade barriers” as justification, calling them persistent obstacles to fair trade.
However, Trump offered a potential exemption — the 25% tariff would not apply to Malaysian companies that choose to relocate manufacturing or assembly operations to the US.
He also warned that any retaliatory action from Malaysia would be met with additional tariffs stacked on top of the existing rate.
Malaysia has been in negotiations with Washington since April to reduce the earlier 24% rate, with the latest round held on June 18.
