Malaysia will continue its negotiations with the United States after President Donald Trump imposed a 25 per cent tariff on Malaysian exports, effective Aug 1.
No justification was provided for the one per cent hike in a letter posted on Trump’s Truth Social account. Malaysia’s International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz (main image) told reporters in Kuala Lumpur this afternoon: “It’s best to ask the US (about the increase).”
Trump had earlier, on April 2, announced tariff hikes on several countries, with Malaysia initially slapped with a 24 per cent rate.
“Malaysia takes note of the decision and will continue the constructive dialogue. The ministry’s negotiating team has met with its US counterparts 25 times. There are specific red lines that we will not compromise on,” said Tengku Zafrul.
He added that Malaysia’s trade deficit with the US – an issue raised by Trump – had in fact declined over the past six years.
While Tengku Zafrul did not reveal what Malaysia’s non-negotiable “red lines” were, he said discussions were ongoing on matters such as Malaysia’s halal certification standards and labour laws.
“We cannot compromise if it involves national sovereignty … this is not just about tariffs but non-tariff barriers. We must consider the bigger picture.”
In its 2025 National Trade Estimate Report on Foreign Trade Barriers, the Office of the US Trade Representative (USTR) stated that Malaysia’s halal requirements exceeded international norms, requiring halal-only facilities and complex registration processes that raised costs and caused delays. The report also listed Malaysia’s Bumiputera equity requirements as trade barriers.
In May, Prime Minister Datuk Seri Anwar Ibrahim told a special parliamentary session that core national policies – including those relating to the Bumiputera – would remain unchanged in any trade negotiations with the US.
Anwar is scheduled to meet US Secretary of State Marco Rubio tomorrow. Rubio is due to arrive in Kuala Lumpur for the Asean-United States Post-Ministerial Conference, the East Asia Summit Foreign Ministers’ Meeting, and the 32nd Asean Regional Forum Foreign Ministers’ Meeting.
Tengku Zafrul, meanwhile, said he would be having a video call with a US trade representative tomorrow.
“Our negotiations will span across various sectors – iron and steel, electrical and electronics, and agriculture. On certain environmental and labour issues raised by the US, we will align them with global standards,” said Tengku Zafrul, though he did not specify which issues were being reviewed.
Fresh off his return from the BRICS Summit in Brazil, Tengku Zafrul said Malaysia would continue to engage all markets and economic blocs. He added that Malaysia was also reviewing existing regulations “to strengthen economic security not just for the US, but for Malaysia as well.”
He noted that the one per cent increase was minor compared to hikes faced by Thailand and Indonesia, and that there was still room for negotiation before the Aug 1 deadline.
“We will continue to negotiate … there must be give and take. When there are red lines, we must defend them. Rest assured, we have stood firm in previous discussions, and once we explained the rationale behind our policies, the US accepted our reasoning. We are still optimistic. Engagement continues. We have until Aug 1.”
While Tengku Zafrul and his team brace for intense negotiations over the next few weeks, Malaysia is also looking at strengthening its domestic economy.
“We need to be more competitive, more innovative. We must move up the value chain. The government is committed to supporting key sectors – these are our main mitigation strategies.
“Malaysia is an open economy. Malaysia-US trade accounts for 15 per cent of our total trade. But we also have free trade agreements with many other countries – the other 85 per cent. We must be fair to them too,” he added.
