FX.co ★ Malaysia Agrees to Cut Tariffs on 98% of U.S. Goods

Malaysia is set to significantly reduce or eliminate import duties on approximately 98% of goods from the United States, as part of a strategic initiative to decrease bilateral tariffs, Trade Minister Tengku Zafrul Aziz announced in Parliament on Monday. This move comes in response to the United States reducing tariffs on Malaysian exports, lowering them to 19% from the previous 25%. While Malaysia will exempt certain U.S. agricultural products, such as fruits and seafood, from import duties, excise taxes will remain intact. Additionally, Malaysia has decided against fully liberalizing key sectors, including the automotive industry. Minister Zafrul explained that although Malaysian semiconductor exports are currently not subject to U.S. tariffs, they are undergoing review under Section 232, presenting a potential risk for new tariffs. In an effort to address the trade imbalance, Malaysia has committed to substantial U.S. purchases, including $19 billion in Boeing aircraft, $150 billion in technology-related products over the next five years, and $70 billion in U.S. investments over the next decade. Other significant agreements involve liquefied natural gas (LNG), telecommunications equipment, and coal imports. A joint statement regarding these developments will be issued shortly.