PETALING JAYA (July 24): Malaysia is still on track to secure a trade deal with the US by the Aug 1 deadline at the lowest possible tariff, according to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

He denied a Bloomberg report that Malaysia was eyeing a 20% tariff. “No, that is not the direction, the direction is to get as low as possible,” he told the press on Thursday.

However, Zafrul admitted he is "not confident" of securing a sub-20% tariff, but said that is his target.

A 25% US import tariff currently hangs over Malaysian goods, slated to take effect on August 1 unless extended talks yield a different outcome.

As to what concessions are necessary, Zafrul said the recently announced deals by the US give a rough indication of what is required.

Earlier this week, Japan secured a 15% tariff by opening several of its markets and committing investments into the US, while the Philippines got a 19% tariff after agreeing to remove duties on US goods.

“But every country has different challenges when it comes to what we can offer because we are not able to offer things we don’t have or things we feel that may be detrimental to Malaysian industries,” Zafrul said.

“These things we need to look at but on balance, to get to a number which we feel is fair for both parties,” he added. 

As for specifics, Zafrul remained tight-lipped on the concessions Malaysia is offering in talks with the US, stating that details would only be revealed upon the completion of negotiations.

Meanwhile, Zafrul said it was unclear whether an extension would be provided to continue talks if Malaysia fails to secure a deal with the US by he August 1. “No discussion [was held] on an extension,” he said.

Zafrul previously said non-tariff barriers have been central to Malaysia’s trade talks with the US and some key sticking points are tied to Malaysia’s national interest, such as halal certification and government procurement.

Last week, he said the ministry was in discussion with regulators and key industries pertaining to easing foreign ownership caps as part of US trade talks.

Malaysia caps foreign equity in sectors such as financial services, telecommunications and power, which are deemed strategic. For example, the power sector limits foreign ownership to 49%, while commercial banks are capped at 30%.