KUALA LUMPUR, Nov 6 — Malaysia’s trade with the United States grew by 15.4 per cent to RM270.88 billion between January and September this year despite new tariffs announced by Washington, said Investment, Trade and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz.
In a written parliamentary reply to Datuk Seri Ismail Sabri Yaakob (BN–Bera), Tengku Zafrul said the United States remained one of Malaysia’s main trading partners and a key source of foreign investment.
He said more than 7,700 Malaysian companies export to the US, employing about 1.1 million workers, with the electrical and electronics (E&E) sector as the largest contributor.
However, Tengku Zafrul warned that any retaliatory tariff measures by the US could directly affect Malaysia’s economy if not managed prudently.
He said the 25 per cent countervailing tariff announced on July 7 would have reduced demand for Malaysian products in the US market if not addressed through diplomatic engagement.
“The higher tariff will make Malaysian goods less competitive, while US importers may shift the tariff burden onto Malaysian exporters,” he said in his written reply.
He added that such measures could result in cancelled orders, lower export revenues, and pressure on local producers to cut prices to stay competitive.
Tengku Zafrul said local and foreign companies operating in Malaysia might also reduce operations, delay expansion, or relocate to countries with lower tariffs and more favourable investment climates.
He noted that Bank Negara Malaysia had revised the 2025 GDP growth forecast to between 4.0 and 4.8 per cent from an earlier range of 4.5 to 5.5 per cent following the tariff announcement.
The minister also cautioned that Malaysia could face an influx of cheaper imported goods as affected exporters from other countries redirect their products to alternative markets, including Malaysia.
He said this could create unfair competition for domestic producers and raise the risk of US scrutiny over transshipment or tariff circumvention activities.
To address the issue, Tengku Zafrul said the government adopted a “whole-of-government” approach, pursuing trade diplomacy to safeguard national interests while maintaining strategic ties with the US.
He said the negotiations concluded successfully on Oct 26 when Prime Minister Datuk Seri Anwar Ibrahim and US President Donald Trump agreed to maintain the countervailing tariff at 19 per cent from Aug 1.
Tengku Zafrul said avoiding negotiations or taking retaliatory action could have jeopardised RM198.65 billion in exports and disrupted small and medium enterprises that depend on the US market.
He said the Madani government would continue to strengthen Malaysia’s export competitiveness through the National Trade Blueprint and the New Industrial Master Plan 2030.
He added that under the 13th Malaysia Plan, exports are projected to exceed RM2 trillion by 2030, with an average annual growth of 5.8 per cent supported by stronger promotion and industrial development programmes.
