KUALA LUMPUR: The average Malaysian import tariff on goods from the United States is only 5.6%, not 47% as claimed by the US administration, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
He said Malaysia does not agree with the basis used to calculate the 24% retaliatory tariff on its exports to the US, and is seeking clarification on the methodology.
“As we understand it, the US tariffs are not a direct reflection of what we impose on them, but rather a response to trade surpluses. Malaysia recorded a trade surplus of US$25 billion with the US. Other countries like Vietnam, which also have high surpluses were hit with higher tariffs, while Singapore, which has a trade deficit with the US, faces only a 10% retaliatory tariff.
“Malaysia remains fully committed to finding a solution that maintains market access, attracts sustained foreign investment, and supports the well-being of our workers and businesses. As such, for now, Malaysia will not take any retaliatory action,” he told reporters in a press conference on the US tariffs at Menara Miti today.
Tengku Zafrul also said the government will review its 2025 approved investment growth target of 5% in light of the new tariffs, which could directly impact Malaysia’s economic performance this year and potentially beyond.
“From an investment standpoint, early feedback from both foreign and domestic investors suggests it is still too soon to assess the full impact on their operations, especially with the tariffs taking effect on April 9. Some investors have indicated that their supply chains will be affected — particularly in contract manufacturing – while some Malaysian firms are already slowing expansion plans, cutting costs and shifting focus to market diversification.
“While certain Malaysian exports may become more competitive compared to countries facing higher tariffs, weaker global demand as a result of the tariff measures could still drive down overall export value. Also, if more investors move to Malaysia due to our lower tariff rate, that could further widen our trade surplus with the US – which is exactly what triggered these retaliatory tariffs in the first place. It’s clearly not a long-term solution.”
He said Malaysia is intensifying its trade diplomacy efforts following the US’s recent imposition of sweeping retaliatory tariffs on a range of global exporters, a move that could have ripple effects on Malaysian industries and the broader economy.
He announced that strategic engagement with U.S authorities is being accelerated to mitigate the impact and safeguard key national interests.
While Malaysia has not been spared – its exports to the US will be subject to a reciprocal tariff of 24% – the Ministry of Investment, Trade and Industry (Miti) views the situation with cautious optimism, Tengku Zafrul said.
“The rate, although not insignificant, is considerably lower than the tariffs slapped on neighbouring countries such as Cambodia (49%), Laos (48%), Vietnam (46%) and even economic powerhouse China (34%). The relatively moderate tariff imposed on Malaysia provides room for maneuvering through proactive diplomatic channels.”
Tengku Zafrul said Miti believes the current window offers an opportunity to position Malaysia as a stable and reliable trade partner amid broader regional disruptions.
“At the forefront of Miti’s diplomatic push is a focus on securing exemptions and maintaining open trade corridors in high-impact sectors. These include semiconductors, pharmaceuticals, energy products, aerospace components, and critical minerals – all of which have been excluded from the latest round of US tariffs.”
Tengku Zafrul said the fallout from the tariffs, however, remains a concern. While Malaysian exporters may gain an edge over costlier regional competitors, the overall disruption to trade flows could still have a negative impact on gross domestic products job creation and investment inflows.
“Sectors heavily reliant on the US market must prepare for potential contraction in demand,” he stressed.
In parallel with its diplomatic engagements, Tengku Zafrul said, Miti is also strengthening domestic policy tools to deal with secondary effects of the tariffs.
“A key concern is the possibility of Malaysia becoming a dumping ground for products from countries that now face reduced access to the US market. Miti is prepared to activate trade remedies, including anti-dumping and safeguard measures, to protect local industries,” he added.
