The United States and Malaysia have signed a new trade agreement with the import tariff on Malaysian goods to the US remaining at 19% with some exemptions. The agreement was signed by President Donald Trump and Prime Minister Dato’ Seri Anwar at the Kuala Lumpur Convention Centre yesterday during the 47th ASEAN Summit and Related Summits.
The 19% tariff is still the same as the new rate announced by Trump last September. A total of 1,711 Malaysian-made goods exported will now be subject to lower tariffs. This exemption involves exports to the US worth $5.2 billion (~RM 21.9 billion) which is equivalent to 12% of the country’s total exports.
Products specified in Annex III to Executive Order 14346 dated 5 September 2025, Potential Tariff Adjustments for Harmonized Partners will be subject to 0% tariffs.
Among those receiving zero tariff relief are chemicals, pharmaceutical products such as ibuprofen, tropical fruits including durian, semiconductors, aerospace equipment, electronics, palm oil, rubber, timber and more.
Malaysia, on the other hand, has stated its commitment to provide preferential market access to US industrial and agricultural goods such as passenger vehicles, poultry, dairy products, pork, steel, processed foods and to facilitate facility registration and halal certification.
The development of the critical minerals and rare earths sector will also be carried out through cooperation with US companies. Malaysia has agreed not to ban, or impose quotas on, exports of critical minerals or rare earth elements to the US and to ensure that there are no restrictions on the sale of rare earth magnets to US companies.
In addition, Malaysia will not impose a digital services tax that discriminates against US companies, strengthen intellectual property protection, customs facilitation and support cross-border data transfers and a moratorium on customs duties for electronic shipments.
Malaysia has previously confirmed commercial agreements for the purchase of 30 Boeing aircraft by Malaysia Aviation Group, LNG imports worth up to $3.4 billion, and purchases of semiconductors and data center equipment worth $150 billion.
According to the Office of the United States Trade Representative, the trade deficit between the United States and Malaysia is the 14th largest with Malaysia exporting goods worth $24.9 billion (~RM 105.7 billion) through 2024.
