PETALING JAYA: Tariffs imposed by the US government have prompted a number of reactions.
Some countries like China and Canada have lost their cool and retaliated with their own tariffs on US products.
These tit-for-tat reactions have rattled the market extensively, but Malaysia’s government has made one thing clear: It will negotiate, not retaliate, against the 24% reciprocal tariffs imposed on goods.
Fortunately, the implementation of these tariffs has been suspended as the government gears up to head into negotiations set on April 24, 2025.
Maybank Investment Bank Bhd (Maybank IB) stated that the key question is: What can Malaysia bring to the negotiating table to help keep the economy stable?
The research house also noted remarks from Stephen Miran, the chair of President Donald Trump’s Council of Economic Advisers, regarding the ongoing talks.
For context, there are some 75 countries in the queue to begin negotiations with the United States, with 15 already in active discussions.
Miran has called on US trading partners to accept the tariffs, boost defence spending, increase procurement from the United States, stop unfair and harmful trading practices, and invest more into the world’s largest economy.
Maybank IB said Malaysia could reduce tariffs on imports from the United States, estimating that at least one-fifth of the country’s imports from the United States are subject to tariffs higher than the average most-favoured-nation tariff to the United States, which is 5.6%.
The tariffs range from 8% to 10% for textiles, rubber, leather, footwear, plastics products, live animals, meat, iron and steel, and between 14% and 21% for motor vehicles, transport equipment, non-metallic mineral products and cereals.
Maybank IB also noted that Malaysia could address some of the non-tariff barriers raised by the US Trade Representative.
“These include the National Automotive Policy, halal imports requirements, foreign equity ownership limits, as well as operational terms and conditions mainly in the services sector,” it noted.
Malaysia could also buy more US-made products and contribute to rebuilding the manufacturing sector in the United States.
“Malaysia’s government-linked investment funds can look into investment opportunities in the US manufacturing sector, via the real estate and infrastructure portfolio of their overseas investments,” Maybank IB said.
Meanwhile, KSI Strategic Institute for Asia Pacific and Economic Club of Kuala Lumpur senior economic adviser Dr Anthony Dass told StarBiz that the upcoming negotiations present a strategic window to deepen ties while safeguarding national interests.
He said it is vital for Malaysia to strike a balance between economic ambition and policy autonomy, while positioning itself as a reliable, competitive partner in the Indo-Pacific.
Dass suggested Malaysia strengthen its supply chain resilience, particularly in electrical and electronics (E&E) and semiconductors, where it already plays a key role.
“Malaysia can position itself as a trusted alternative in Asia to support US efforts to diversify away from single-country dependency. Collaborations in advanced manufacturing, testing and packaging can be offered, and we can even propose co-investment in upskilling and centres with US firms.”
Dass also highlighted Malaysia’s potential as a gateway to the halal economy for US companies, offering expertise in halal certification and compliance.
“Malaysia can also leverage its ability to be a regional hub for US halal food and beverage (sector), and Islamic finance ventures,” he noted.
Dass said Malaysia will likely prioritise discussions on trade and investment facilitation to streamline business flows.
He suggested that greater market access for commodities like palm oil, rubber, E&E and medical devices could be on the table.
Malaysia may also push for the removal of non-tariff barriers, clearer rules of origin and harmonised technical standards.
When asked how Malaysia could strengthen ties with the United States, Dass pointed out that with the United States ramping up green investment via the Inflation Reduction Act, there are opportunities for Malaysia to engage in this area.
“We can invite US firms to invest in solar, hydrogen and carbon trading, and propose technology transfers in return for market access and regulatory alignment.
“We can also work at aligning with environmental, social and governance standards to attract climate-aligned foreign direct investment,” he said.
Regarding labour and human rights which are sensitive issues for the United States, Dass said Malaysia can highlight progress in these areas.
“The US may raise concerns over forced labour and labour standards. We can show where we’re at, especially in plantations and manufacturing, while seeking collaborative frameworks for improving compliance,” he said.
Despite tariff-related uncertainties, Dass emphasised that both Malaysia and the United States can work together for mutual benefit.
He pointed out that Malaysia brings to the table a strategic location, sectoral strengths and growing policy maturity, while the United States brings capital, technology and global market access.
“A balanced deal will hinge on mutual trust, value-added collaboration and respect for domestic policy space – not one-sided expectations.”
