KUALA LUMPUR (Feb 6): The risk of negative impact on Malaysia's semiconductor exports to the US, following the implementation of tariffs by US President Donald Trump, is seen as minimal for the time being, said the Ministry of Investment, Trade and Industry (Miti).

Minister Tengku Datuk Seri Zafrul Abdul Aziz said this is because Malaysia was excluded from the recent US tariff increase imposed on several countries.

“Additionally, investment records also show that investments from the US remain strong, as the country is among the largest investors, totalling RM5.1 billion in the third quarter of 2024,” he said during the minister’s question time in the Dewan Rakyat on Thursday.

Zafrul was responding to Datuk Ku Abd Rahman Ku Ismail (Perikatan Nasional-Kubang Pasu), who asked Miti to outline the government’s steps in addressing geopolitical issues and global trade uncertainties, particularly the possibility of tariff increases that would affect Malaysia’s exports, especially to the US.

The minister said that Malaysia had also signed a memorandum of cooperation on semiconductor supply chain resilience with the US on May 10, 2022. 

He said this agreement reflects the ongoing commitment of both countries to ensure a strong and resilient semiconductor supply chain, and to strengthen economic and strategic ties between Malaysia and the US.

“Therefore, the ministry is confident that existing investors from the US will remain in Malaysia, and continue to grow to strengthen their global supply chain,” he said.

Zafrul said that the US was Malaysia’s third-largest trading partner in 2024, with a trading volume of RM324.9 billion, accounting for 11.3% of Malaysia’s total trade.

“Exports to the US amounted to RM198.6 billion, equivalent to 13.2% of Malaysia’s total exports, while imports from the US reached RM126.3 billion, equivalent to 9.2% of Malaysia’s total imports.

“In terms of investment, the US is among the largest investors, and so far, Malaysia has become the preferred investment destination for more than 600 American companies,” he said.

In this regard, Zafrul said the government is proactively trying to maintain and further strengthen the good and dynamic bilateral trade and investment relations with the US to avoid tariff increases like those imposed on China, Canada, and Mexico.

He added that the government would ensure that Malaysia remains a reliable trading and investment partner for all its partners, including the US.

“This includes a conducive and investor-friendly investment ecosystem, effective export control regulations and strategic trade management, as well as compliance with international standards that reassure investors,” he said.

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