02/08/2025

SATURDAY | AUG 2, 2025

2

US lowers tariff on Malaysian goods

o Rate reduced from 25% to 19%, providing country with export advantage over Asean members Vietnam and Myanmar

The revised 19% rate is therefore seen not only as a diplomatic achievement but also a strategic edge, especially over regional peers who now face slightly steeper duties. Prime Minister Datuk Seri Anwar Ibrahim said he had a phone conversation with US President Donald Trump at 6.50am on Thursday to raise concerns over the tariff hike, highlighting Malaysia’s commitment to the principles of free trade. Trump also reiterated his

after 12.01am Eastern Daylight Time, seven days after the order issuance. “The new rate shall not apply to such goods (already in transit) and shall instead remain subject to the additional ad valorem duties previously imposed,” it said, referring to items shipped before the deadline and entered for consumption before 12.01am EDT on Oct 5, under Executive Order 14257. The earlier 25% duty had triggered concern among Malaysian exporters, particularly in sectors such as electronics, rubber and palm oil. Industry players had warned that the steep tariffs would erode competitiveness and disrupt established supply chain ties.

tariff policy inception. The downward revision from 25% to 19% follows months of negotiations and formal talks. Malaysia had been lobbying Washington since April to soften the 24% tariff announced then, which was further increased to 25% in July. The most recent push came on June 18, when Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz travelled to Washington to meet US Trade Representative Jamieson Greer and other senior officials. The White House confirmed that the new tariff rate would apply to goods entered for consumption or withdrawn from warehouses on or

PETALING JAYA: The United States has imposed a 19% tariff on Malaysian imports, notably lower than the originally announced 25% blanket tariff, putting Malaysia slightly ahead of several Asean neighbours now facing higher duties. According to a presidential order Ű BY HASHINI KAVISHTRI KANNAN newsdesk@thesundaily.com

issued by the White House on July 31, the same 19% rate applies to Cambodia, the Philippines, Thailand and Indonesia. While the figure is still substantial, it now sits just below tariffs imposed on Vietnam (20%), Brunei (25%) and far below Laos and Myanmar (40%). Singapore remains the only regional outlier with a base tariff of 10%, unchanged since the reciprocal

administration’s position that no tariffs would be imposed on Malaysian companies that choose to build or manufacture products directly in the United States. ‘Trade deal unlikely to ease cost of living’ PETALING JAYA: The reduction in US tariffs on Malaysian exports is a win for trade, but it would not ease the cost of living for consumers anytime soon, said the Federation of Malaysian Consumers Association (Fomca). Its president Dr Saravanan Thambirajah pointed out that domestic policies, not foreign tariffs, are what shape household expenses. He said the cut from 25% to 19% would boost export competitiveness and job stability but any relief for consumers would be indirect and gradual. “The US tariff cut on Malaysian exports is mainly a trade move, with little direct effect on prices of domestic goods since it applies to exports, not imports,” he told theSun . “As such, Malaysian consumers are unlikely to see an immediate drop in retail prices. But if it helps exporters maintain or grow market share, the resulting stability in jobs and incomes could indirectly support purchasing power over time.” Saravanan said key cost-of-living pressures – food, housing, energy and transport – are driven by domestic policies, commodity prices and currency strength, not external tariffs. “Reducing consumer vulnerability to global trade shocks requires a long-term resilience strategy,” he said, calling for trade diversification to avoid overdependence on a few major economies. He urged greater investment in local food and energy production to ensure supply security and curb unjustified price hikes during global disruptions. He added that targeted subsidies, temporary price controls and SME support are essential to keep domestic supply stable and shield households from external shocks. “A strong domestic industrial base reduces reliance on volatile global markets and protects consumers from sudden tariff shifts.” Saravanan added that sectors such as agriculture, manufacturing and technology must be strengthened to support job creation, income growth and innovation. He said while the immediate gains from the tariff cut benefit exporters, the government could extend these gains by enforcing price monitoring, promoting export pricing transparency and incentivising reinvestment into local wages or pricing. He also called for industry codes of conduct, public awareness campaigns and stronger market oversight to prevent excessive profit taking by intermediaries. “With oversight and cooperation, the economic benefits could gradually flow down to support households.” He said a more resilient economy would also strengthen Malaysia’s hand in future trade negotiations. – By Qirana Nabilla Mohd Rashidi

Reduced levy to take effect on Aug 8: Minister

PETALING JAYA: The reduced tariffs on Malaysian exports will take effect on Aug 8 following the conclusion of negotiations between both countries, said International Trade and Industry Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz. He said both governments are expected to issue a joint statement this weekend to formalise the agreement, which he described as a significant breakthrough in bilateral trade relations. “ In the tariff negotiations, we adopted a comprehensive and systematic approach in finalising Malaysia’s offer to the US. “ The ministry’s negotiation team worked closely with various government agencies to coordinate efforts. We also obtained Cabinet Ű BY QIRANA NABILLA MOHD RASHIDI newsdesk@thesundaily.com

Development Department. “Compliance with syariah requirements remains a prerequisite for all halal meat imports, including those from the US. Any meat that does not meet the department’s standards cannot be brought into Malaysia.” Tengku Zafrul thanked the US Trade Representative’s Office and the US Commerce Department for their constructive cooperation. He said the ministry has been working with Bank Negara Malaysia to assess the economic implications of various tariff levels and would coordinate with other ministries to support local exporters, especially SMEs. The ministry will also promote the use of Malaysia’s 18 free trade agreements to diversify export markets and align efforts with long-term national strategies, including the New Industrial Master Plan 2030, Green Investment Strategy and the National Semiconductor Strategy.

approval to present an offer to the US that we believe is fair for Malaysia.” Hesaid the outcome reflects the strength of Malaysia-US economic ties with the US remaining Malaysia’s largest export market valued at RM198.65 billion in 2024, and affirms Malaysia’s credibility as a reliable trade and investment partner. Tengku Zafrul said the revised 19% tariff aligns Malaysia with regional competitors, helping safeguard national interests while maintaining export competitiveness. He also directly addressed public concerns that Malaysia may have compromised its halal standards to meet US demands, dismissing such claims as false. “What was agreed upon was to facilitate the import process of US halal meat into Malaysia, which will be carried out by US halal certification bodies recognised by the Islamic

SHARING INFORMATION ... Communications Minister Datuk Fahmi Fadzil at a weekly media conference held at Menara Komunikasi in Putrajaya yesterday. – BERNAMAPIC

Cambodia agrees to border talks in KL PHNOM PENH: Cambodia and Thailand will continue with mediation talks to resolve their border dispute at an upcoming General Border Committee (GBC) meeting scheduled to be held in Malaysia later this week.

have representatives of three countries – Malaysia, the United States and China (to attend as observers),” said its Deputy Prime Minister and Minister of National Defence Gen Tea Seiha. The minister has agreed to a proposed Aug 4 to 7 date for the GBC meeting. Tensions between Thailand and Cambodia flared on July 24. – Bernama

for Aug 4 in Phnom Penh. However, on Thursday, Thailand proposed Malaysia as a neutral venue and for the duration to be extended from one day to four. Cambodia has agreed to Thailand’s request, according to a report by Cambodian state media Agence Kampuchea Presse. “Cambodia agrees to Thailand’s proposal to meet GBC in Malaysia and proposes to

The GBC was part of a ceasefire agreement reached between the two countries at a special meeting in Putrajaya on July 28. The GBC meeting was originally planned