KUALA LUMPUR, Oct 26 — The new reciprocal trade agreement signed by Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump today offers Malaysia better access to the US market without altering any previous commitments between the two nations.
Speaking to reporters, Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz said some 1,711 tariff lines — comprising key export commodities such as palm oil, rubber, cocoa, aircraft parts and pharmaceuticals — have been exempted from the 19 per cent tariff.
The exempted items, he said, are worth US$5.2 billion (RM21.96 billion) and account for 12 per cent of the country’s total exports.
The minister said the Trump administration has also agreed to give due consideration to semiconductor exports from Malaysia under Section 232 of the US Trade Expansion Act.
“There have been no changes to our earlier commitments.
“In fact, the deal we have sealed today offers us better access compared to what was previously announced before,” Tengku Zafrul said at a press conference on the sidelines of the 47th Asean Summit and Related Summits at KLCC, here, today.
“In terms of benefit to the Malaysian industries — with a lower import tariff, US products can enter the Malaysian market easily and will be more competitive.
“This will make high-quality products such as medical equipment, IT software and machinery spare parts more affordable for Malaysian businesses and consumers,” he added.
Earlier today, Trump made his maiden trip to Malaysia to attend the US-Asean Summit and witness the signing of the KL Peace Accord between Cambodian Prime Minister Hun Manet and Thai Prime Minister Anutin Charnvirakul.
The US recently surpassed China to become Malaysia’s largest export market and is also the country’s top foreign investor, with investments totalling RM32.8 billion in 2024.
Total trade between both countries stood at RM324.91 billion last year.
During the visit, Anwar and Trump elevated bilateral ties between Malaysia and the US to a Comprehensive Strategic Partnership (CSP) and also signed a months-long negotiated reciprocal trade agreement.
The agreement, among others, reaffirmed the Trump administration’s commitment to maintain the 19 per cent tariff on Malaysian goods entering the US.
Under the trade pact, Malaysia has also agreed not to ban or impose quotas on exports of critical minerals or rare earth elements to the US.
The condition is particularly crucial for the US after China — the world’s largest supplier of rare earth elements — introduced sweeping export restrictions on the highly sought-after resources.
Additionally, Malaysia has agreed to make a slew of purchases from the US, including:
- 30 aircraft, plus a purchase option for 30 additional aircraft
- semiconductors, aerospace components and data centre equipment with an estimated value of US$150 billion
- five million tonnes per annum (MTPA) of liquefied natural gas estimated at up to US$3.4 billion per year
- coal and telecommunications products and services valued at US$204.1 million
Asked if Malaysia was confident about the status of the trade deal given Trump’s past flip-flops, Tengku Zafrul said: “For us (Malaysia), an agreement is an agreement.”
