Tengku Zafrul defends the US-Malaysia trade deal as a strategic move to secure exports against tariffs.
PETALING JAYA: Malaysia did not simply “bow its neck” in negotiating the new trade agreement with the United States, said Minister of Investment, Trade and Industry (MITI) Datuk Seri Tengku Zafrul Abdul Aziz, as he defended the Agreement on Reciprocal Trade (ART).
The minister stressed that the negotiations were not voluntary but a response to unilateral tariffs imposed by the US, affecting Malaysia and hundreds of other trading nations.
“Whether we like it or not, we had to face this reality. We had no choice but to negotiate for the sake of our nation’s interests and economic stability,” he said in Parliament today.
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Highlighting the importance of the US as Malaysia’s largest export market, Tengku Zafrul said Malaysia–US trade reached RM325 billion in 2024, with Malaysian exports to the US totaling RM198.65 billion, and RM166.38 billion from January to September 2025 alone.
He warned that the deal affects millions of Malaysians whose livelihoods depend on sectors such as electrical and electronics, aerospace, rubber, cocoa, and pharmaceuticals.
“If we are careless, slow, or fail to act decisively, it is ordinary Malaysians who will lose jobs and income — not Members of Parliament sitting comfortably in this House,” he said.
The minister also clarified that reciprocal tariffs were imposed on all US trading partners, not only countries with trade surpluses.
Countries with trade deficits, including Singapore and Australia, were also affected.
Malaysia, initially facing a proposed 25% tariff that was later reduced through negotiations and maintained at 19% for most products, proactively began negotiations in May to reduce tariffs and preserve the competitiveness of Malaysian exports.
“This approach gives Malaysia an advantage compared to doing nothing or retaliating against the US — which could risk exports worth RM198.65 billion across multiple sectors supporting the national economy, including SMEs, and affect millions of workers,” he added.
He emphasised that the government acted swiftly and prudently, not to surrender, but to protect business continuity, safeguard incomes, and uphold Malaysia’s international standing.
The ART was signed by Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump on 26 October, on the first day of the Asean Summit.
