KUALA LUMPUR (May 6): The government is considering a special package to mitigate the impact of US tariffs on affected sectors, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

No details were provided, with Zafrul merely saying that it is under discussion and hinges on the results of Malaysia’s trade talks with the US. By July, when negotiations with the US have concluded, material discussions can be held and a decision on the initiative can be made, he noted.

“At this juncture, we’re focused on the negotiations with the US. Once negotiations with the US conclude, we will know the potential impact, who will be affected, and at that time we can make a decision,” Zafrul said at a press briefing on the ministry’s quarterly report card.

Further, the Investment, Trade and Industry Ministry (Miti) will have to discuss with the Finance Ministry on the available fiscal space, he noted.

Sectors most vulnerable to the US tariffs include electrical and electronics, medical devices, pharmaceuticals, automotive and aerospace, machinery and equipment, furniture, and palm oil and rubber-based products, according to Zafrul.

More than 60% of Malaysia’s exports to the US in 2024 were electrical and electronic goods worth RM119.86 billion. Malaysia also shipped optical and scientific equipment, machinery and parts, as well as rubber and wood products to the world’s largest economy and its major trading partner.

Of these electrical and electronic products exported to the US, only 59% would be exempted from the US’ current 10% blanket additional tariff. The remaining 41%, or RM49.54 billion worth of goods, would be hit by the additional tariff set to rise to 24% if trade talks with the US fail.

Negotiations between Malaysia and the US began on Tuesday morning, with Miti deputy secretary general of trade Mastura Ahmad Mustafa leading talks as Malaysia’s chief negotiator, Zafrul said.

The negotiations will be reciprocal, with both sides ready to cut tariffs, he stressed. “If we do reduce, we also want to ensure that it doesn’t harm Malaysian companies or the economy,” Zafrul said. “We want something that we can negotiate [with], so definitely we are open to that.”

Other items listed in Miti’s immediate next steps also include having relevant ministries cooperating to address non-tariff barriers and increasing US bilateral trade, he added.