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KUALA LUMPUR (Aug 1): Malaysia said the lower US reciprocal tariff rate is a “positive outcome” and the government would find ways to mitigate the impact of tariffs on its exports.
“Most importantly, Malaysia had stood firm on various ‘red line’ items, and the 19% tariff rate was achieved without compromising the nation’s sovereign right to implement key policies to support the nation’s socio-economic stability and growth,” said the Ministry of Investment, Trade and Industry (Miti) in a statement.
Miti minister Tengku Datuk Seri Zafrul Abdul Aziz said the outcome of the tariff negotiation is also a testament to Malaysia’s credibility as a reliable trade and investment partner.
"We thank our counterparts in the US especially the US Trade Representative’s Office and the Department of Commerce for their constructive cooperation and support throughout the negotiation process,” he said.
Miti has been working closely with Bank Negara Malaysia to assess the economic impact of varying tariff levels on Malaysia's gross domestic product, read the statement.
To manage the 19% tariff impact, Miti will work with other ministries and agencies to mitigate effects on exports, including promoting the use of Malaysia's 18 free trade agreements to diversify markets, it added.
Miti will advance industrial reforms under key policies like the New Industrial Master Plan 2030, Green Investment Strategy, and National Semiconductor Strategy to enhance efficiency and productivity.
The ministry is exploring further government support for businesses, particularly small and medium enterprises, to adapt to the new baseline tariff rate.
Since March 2025, global economic uncertainty has intensified due to shifting trade policies, tariff disputes, and geopolitical tensions.
As an export-driven economy, Malaysia faces risks from these external factors but remains resilient due to strong domestic demand and ongoing policy reforms.
Miti will leverage approved investments, infrastructure projects, and trade diversification to sustain growth and defend Malaysia's trade interests.
Zafrul emphasised Malaysia's commitment to fostering partnerships with key economies like the US while pursuing industrial reforms.
Miti thanked stakeholders, including the prime minister, government agencies, and business councils, for their role in negotiating Malaysia's tariff response.
The ministry plans outreach programmes to guide exporters on revised US tariffs and aims to strengthen trade ties with the US, Malaysia's top export market and foreign investors.
The US is Malaysia’s biggest export market, valued at RM198.65 billion, as well as biggest source of foreign investments, with approved investments valued at RM32.82 billion in the year 2024.