FX.co ★ Malaysia Seeks 20% U.S. Tariff, Rejects EV, Ownership Demands

Malaysia is reportedly engaged in discussions with the United States to lower proposed tariffs to approximately 20%, with the goal of reaching an agreement before the 25% tariffs are set to be implemented on August 1, as reported by Bloomberg News. The administration under Prime Minister Anwar Ibrahim aims for equitable terms similar to those of other regional countries such as Indonesia and Vietnam. However, Malaysia is resisting U.S. demands associated with electric vehicles, limits on foreign ownership, and subsidies. Although Malaysia has addressed certain issues, particularly related to semiconductors, it has opposed prolonging tax incentives for American electric vehicles, loosening foreign ownership limitations in the energy and financial sectors, and reducing subsidies for local fishermen. Trade between the two countries amounted to $80.2 billion in 2024, with the United States experiencing a $24.8 billion trade deficit. Additionally, Investment Minister Zafrul Aziz has cautioned that trade agreements that are not well-designed could potentially jeopardize Malaysia’s long-term economic interests.