Window for tariff reduction still open: Tengku Zafrul

By NST in July 16, 2025 – Reading time 2 minute

KUALA LUMPUR: Malaysia still has time and room to renegotiate its own position with Washington, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said, amid news that the US has lowered its tariff on Indonesian goods.

US President Donald Trump announced via his Truth Social platform that Indonesian goods entering the US would be subjected to a 19 per cent tariff. This is notably lower than the 32 per cent rate he had previously threatened.

Tengku Zafrul said Malaysia is awaiting further information before drawing any conclusions.

“We are waiting for an announcement from the Indonesian side. We’ve heard what President Trump said, but I have no further information at this point,” he told reporters after launching International Healthcare Week (IHW) 2025.

For Malaysia, Tengku Zafrul said any decision would only be finalised once discussions are concluded.

“We are still in negotiations. Our talks continue until Aug 1, so there is still time,” he added.

He noted that the US continues to impose a 10 per cent tariff for now, with several key sectors such as pharmaceuticals and electrical and electronics (E&E), particularly semiconductors, remaining exempt.

He said Malaysia is taking a cautious and realistic approach in the discussions, with priority given to national sovereignty and the protection of strategic industries.

“There are issues on which we cannot compromise, such as sovereignty and our strategic industries. The negotiations must be based on a win-win principle,” he added.

Tengku Zafrul also said that any agreement with the US must be aligned with the principle of fair treatment for other trading partners, including Asean, Europe and China.

Earlier in his speech, Tengku Zafrul said the government want to ensure that any agreement supports an open, rules-based and fair, multilateral trade, with World Trade Organisation at its core.

He added that the agreement must also safeguard market access, while recognising the need of emerging countries like Malaysia to develop sustainable supply chains and economies.

“We will continue to uphold the principles of positive reciprocity and fair competition while working alongside industry to innovate, diversify and maintain our resilience in the global market.

“These developments are also strong reminders of how and why we must always be ready, agile and adaptable to external shocks,” he said.

In 2024, total Malaysia-US trade rose nearly 30 per cent to RM324.9 billion (US$71.4 billion), with Malaysia being an important source for key products such as E&E, machinery and equipment, rubber gloves, wood-based products and palm oil.

Malaysia has long served as a key production hub for US investments, with 169 American-led projects valued at RM77.5 billion recorded since 1980, primarily in sectors such as E&E, machinery and scientific equipment.

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