25/02/2026

WEDNESDAY | FEB 25, 2026

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countries Malaysia could trade with. “It is worthwhile to avoid ART for now as unstable US decisions create business uncertainty and make planning difficult.” For long-term growth, she recommended holding off on the agreement. “At this point, I would choose abandonment because the US situation is unstable and signing an agreement would be risky. Since Malaysia has no control over US decisions, it is better to wait until the situation stabilises. “Later, once the US government is more stable, we can reconsider negotiations, ensuring any future agreement is fair and not lopsided.” As Malaysia awaits further clarity, Mohd Yazid warned that strategic preparation is essential. “Delaying ratification, if done politely and framed as a legal or technical review, could be defensible diplomatically because ART only takes effect after both sides exchange written notices and observe a waiting period. “Malaysia could cite the need for legal certainty given the US court decision and ongoing policy shifts. In the end, Trump remains unpredictable and Malaysia needs to prepare for all possibilities.” – BY HARITH KAMAL Approvals for new non-AI data centres halted, says PM PETALING JAYA: The government has stopped approvals for new data centres unrelated to AI amid rising concerns over energy and water consumption, said Prime Minister Datuk Seri Anwar Ibrahim. He said projections from the Energy Transition and Water Transformation Ministry indicate sufficient supply for AI-related facilities over the next one to two years. “Energy and water consumption have risen significantly. About one and a half to two years ago, the government limited approvals for new data centres not related to AI or high-value technology. “New applications that take advantage of lower water and energy costs have been halted,” he said during the Prime Minister’s Question Time in Parliament yesterday. He was responding to Besut MP Datuk Che Mohamad Zulkifly Jusoh, who raised concerns that rapid AI growth has increased electricity and water usage, citing US statistics showing that data centres consume around 4.4% of national electricity and millions of litres of water for server cooling. Anwar said short-term energy needs can still be met but the potential strain on the national grid and electricity tariffs must be taken seriously. He highlighted long-term initiatives, including the Asean Power Grid linking Vietnam, Peninsular Malaysia and Singapore, and plans to channel energy from Sarawak to Peninsular Malaysia and Singapore. He said while carbon footprint limits may not be directly included in the proposed AI Governance Bill, existing energy regulations could address these concerns. On AI governance, Anwar said the Bill would prioritise ethical use, accountability and protection of citizen rights. “In our national context, issues of citizen rights and moral and ethical considerations will be given special attention. This may differ from Western approaches, which focus more on technical and legal aspects.” The Bill, in early drafting under the Digital Ministry, aims to cover the full AI system life cycle, from development and training to deployment, monitoring and risk management. It would also define accountability measures and clarify the roles of developers and deployers. He said the Bill would include a risk and classification framework, integrating harm and incident reporting to balance innovation with ethical standards and avoid overburdening local MSMEs. – BY HARITH KAMAL

‘Govt assessing impact of court ruling on US tariffs’

o For trade strategy, we must consider our country’s interests: Anwar

Ű BY HARITH KAMAL newsdesk@thesundaily.com

International Islamic University Malaysia international relations expert Assoc Prof Dr Mohd Yazid Zul Kepli said Malaysia should take a measured approach. “Malaysia should acknowledge the US Supreme Court ruling and treat it as a signal that US tariff policy could shift quickly under President Donald Trump. “Malaysia should also temporarily hold off on completing ART’s entry-into-force steps while seeking clear written assurances from the United States on what tariff authority will actually apply going forward and how Malaysia’s market access will be protected.” He suggested Malaysia maintain warm relations with Washington while putting safeguards in place. “At the same time, Malaysia should propose a technical review or side-letter mechanism so that commitments stay valid even if US tariffs PETALING JAYA: The government will take its time assessing the impact of the US Supreme Court ruling on tariffs to ensure Malaysia–US trade relations are not harmed, said Datuk Seri Anwar Ibrahim. The prime minister was responding to calls for the government to review its trade agreements following the court decision, which challenged certain tariffs imposed under US law. “Calls to reassess based on the court ruling, I agree with that. But any decision from us should not be made immediately. We need to wait,” he said during the Prime Minister’s Question Time in Parliament yesterday. He highlighted that the US administration continues to use other legal provisions, including Section 232 of the Trade Expansion Act 1962, which allows sector-specific tariffs after Commerce Department investigations, and Section 301 of the same Act, which permits tariffs on countries engaged in unfair trade practices. Other provisions, including sections 201 and 338 tariffs and classifications codified by Congress, remain pending under congressional authority, making their implementation uncertain. “Why should we rush? Just because the US Supreme Court made a decision three days ago, are we expected to act today strictly according to that ruling? I disagree. Whatever decision we make must be carefully considered,” said Anwar. He emphasised that Malaysia must first defend its economic and trade interests, monitor how other countries respond and consider domestic US policies. “This is not about challenging the Supreme Court decision. Certain sections could still be applied in trade dealings, which are not included in the ruling.” He urged the government to allow the Investment, Trade and Industry Ministry and

Anwar (right) speaking with Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani while chairing the ministry’s top management meeting in Kuala Lumpur yesterday. – BERNAMAPIC

On the implications of the US Supreme Court ruling, Anwar said Malaysia must assess the situation before acting. “This is not yet final as the Supreme Court ruling clarifies that certain powers belong to Congress rather than the president, but other provisions still allow the US president to act, so it is too early to make decisions based solely on that ruling.” He reiterated that Malaysia’s focus is on protecting national trade and economic interests, adding that the Cabinet would continue discussions on US tariffs on Friday. On Feb 20, the US Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act 1977, which had provided the legal basis for Trump’s actions, including retaliatory measures. Yesterday, Trump warned countries against abandoning recent trade deals with the US following the Supreme Court ruling, and threatened to impose higher duties under other legal authorities for any nation attempting to “play games”.

Mohd Yazid explained that ratifying ART while US tariff policies remain unstable could be interpreted in different ways. “If Malaysia ratifies or fully implements ART while the US tariff basis that triggered the deal is being struck down or reshuffled by US courts and new tariff authorities, critics may see it as the country ‘locking in’ commitments to an unstable US policy environment. “This could appear as reduced policy space or bargaining leverage.” He said economic considerations should remain paramount. “Economic security comes first as ART decisions directly affect market access, supply chains and investor confidence. “Diplomatic relations should be maintained through engagement and practical measures, such as clarifications and review clauses, rather than ‘walking away’. Cabinet ministers time to review all aspects before making decisions. “Any decision we make today may sound dramatic, but what are the risks to our economy? If it is about national pride or sovereignty, that is another matter. But for trade strategy, we must consider the country’s interests,” he said. Anwar warned that hasty actions could jeopardise gains already secured and potentially harm key sectors, such as Malaysia’s growing semiconductor industry. “Malaysia is monitoring developments in the United States, including ongoing congressional debates and other tariff measures by President Donald Trump. We need time to review all implications carefully.” He also defended the decision by former Investment, Trade and Industry minister Datuk Seri Tengku Zafrul Abdul Aziz and the government to sign a trade agreement with the US, saying it takes into account national interests and contains sufficient provisions to safeguard Malaysia’s security and economic position as a trading nation.

Specialists urge caution on proceeding with American trade deal PETALING JAYA: Malaysia’s path forward on the Agreement on Reciprocal Trade (ART) with the United States remains uncertain, with experts urging caution following the US Supreme Court’s decision to strike down previous reciprocal tariffs that initially prompted the deal. change again. “The country should also coordinate messaging with Asean partners and focus talks on ensuring predictability for exporters, rather than on domestic US politics.” Debate over sovereignty also persists. “Domestic politics matters but it should be addressed by clearly explaining Malaysia’s gains, safeguards and red lines, so decisions are guided by long-term resilience, not short-term politics.” Universiti Putra Malaysia Putra Business School Assoc Prof Dr Ida Md Yasin stressed caution from an economic perspective.

“We should not proceed with ART as the earlier agreement seems lopsided. It appears to favour the United States more than Malaysia.” But she acknowledged the economic tradeoffs. “There are pros and cons. Some goods would face tariffs while others would have zero tariffs. If Malaysia does not participate in ART, the advantages would go to countries that signed with the United States. “However, even in the United States, the situation remains chaotic because the court has declared certain tariffs invalid. So right now, the condition is unstable.” On alternatives, she said Malaysia could diversify its trade. “From time to time, we will face risks. The United States is Malaysia’s third-largest trading partner, so exports to the United States could be reduced. However, there are many other