KUALA LUMPUR, Malaysia. Aug 1, 2025 – The United States has reduced its reciprocal tariffs on Malaysian exports from 25% to 19%, effective immediately, following months of negotiations between the two countries.
The Ministry of Investment, Trade and Industry (MITI) announced the decision on Thursday, describing it as a “significant achievement” that reflects the strong economic ties between Malaysia and the US. The talks, which began on May 6, 2025, concluded on July 31, 2025, with Malaysia maintaining its key “red line” positions without compromising on sovereign rights to implement policies supporting socio-economic stability and growth.
The new 19% rate aligns roughly with tariffs applied to other Southeast Asian nations and comes after sustained bilateral engagements over more than 60 years of complementary trade and investment relations.
MITI Minister Tengku Datuk Seri Utama Zafrul Abdul Aziz hailed the outcome as a testament to Malaysia’s credibility as a reliable trade partner. “This decision by the United States reflects the strong and enduring economic ties between our two nations,” he said in a statement. “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.”
To manage the impact of the reduced but still elevated tariffs, MITI outlined several strategies, including collaborating with agencies like Bank Negara Malaysia to assess effects on GDP. The ministry plans to:
– Work with relevant ministries to mitigate tariff effects on exports;
– Urge exporters to leverage Malaysia’s 18 Free Trade Agreements (FTAs) for market diversification;
– Advance industrial reform programs under policies like the New Industrial Master Plan 2030, Green Investment Strategy, and National Semiconductor Strategy to boost efficiency, automation, and productivity;
– Explore government support for companies, particularly small and medium enterprises (SMEs), adapting to the new baseline rate.
Amid a volatile global economic landscape marked by shifting trade policies, tariff uncertainties, and geopolitical tensions since March 2025, MITI emphasized Malaysia’s resilience. The ministry noted that domestic demand remains robust due to policy support and ongoing reforms sustaining private consumption.
“MITI will continue to work closely with stakeholders to maximize opportunities from this development, including strong momentum in approved investments driven by infrastructure projects, a consistent realization rate of over 85% for approved investments, and catalytic national development initiatives,” Tengku Zafrul added. “We remain committed to defending Malaysia’s trade interests while fostering mutually beneficial partnerships with key economies, including the United States.”
The ministry expressed gratitude to Prime Minister Dato’ Seri Anwar Ibrahim, the Prime Minister’s Office, various ministries and agencies, the American-Malaysian Chamber of Commerce (AMCHAM), the US-ASEAN Business Council (USABC), think tanks, and industry representatives for their roles in the negotiations.
In the coming months, MITI and related agencies will conduct outreach programs to guide the implementation of the revised tariffs.
The US remains Malaysia’s largest export market, valued at RM199.65 billion, and a major source of foreign investments, with approved investments totaling RM32.2 billion in 2024.
MITI serves as a key driver in positioning Malaysia as a preferred destination for quality investments and enhancing its status as a globally competitive trading nation, with goals aligned toward achieving developed nation status.