KUALA LUMPUR (July 4): With the Trump tariff deadline just days away, AmInvestment Bank believes Malaysia is most likely to secure a trade deal that involves a 10% to 24% levy on exports to the US.

That would be the “base case”, and market reaction is expected to be neutral in the short term, the research house said in a strategy note. Banking stocks could be the biggest beneficiary after falling about 5% since the ‘Liberation Day’ tariff announced in April, the house said.

Export-oriented sectors such as technology, plantations, and oil and gas, meanwhile, would be the most at risk, AmInvestment Bank said.

“Frontloading effects are likely to fade over time, shifting investor focus towards potential risks in end demand” that hinges not only on a deal for Malaysia, but other trading partners as well, the house cautioned.

Malaysia is trying to lower a 24% reciprocal tariff on its exports to the US while the sweeping levy is on pause until July 9. Vietnam struck a deal announced on Wednesday, where it would face a 20% tariff on goods shipped and a 40% transhipment tariff.

Talks with the US on the tariffs have made good progress, said Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz on June 22.

The “best case” for Malaysia would be the tariffs being lowered to 10%, which would result in a market rally due to the country’s potential advantage over other countries, said AmInvestment Bank.

“If Trump’s intent is to isolate China but preserve the rest of Asia’s supply chain, Malaysia might benefit long-term from tariff clarity, especially via friendshoring tailwinds,” the house noted. “This repositions Malaysia as a secondary beneficiary even beyond artificial intelligence and data centre.”

In the unlikely “worst-case scenario” of Malaysia being slapped with 24% tariffs or more, AmInvestment Bank warned of a “broad market sell-down”.