KUALA LUMPUR: Malaysia will spend up to US$150bil in the next five years to buy equipment from U.S. multinationals for its semiconductor, aerospace and data centre sectors, part of a deal with Washington to cut tariffs, its trade minister said on Monday.
The United States announced last week that it would impose a 19% tariff on Malaysia starting from August 8, lower than a 25% levy threatened last month.
State energy firm Petroliam Nasional Bhd (PETRONAS)
The United States ran a goods trade deficit with Malaysia of US$24.8bil in 2024, government data showed.
Tengku Zafrul said the two countries were finalising a joint statement covering the commitments made, following weeks of negotiations over the tariffs imposed by U.S. President Donald Trump's administration.
"Despite expecting lower tariff rates, the ministry believes that these negotiations have succeeded in achieving a result that is reasonable with the offers made by Malaysia," Tengku Zafrul said.
Other concessions by Malaysia include reducing or abolishing duties on 98.4% of U.S. imports, the easing of some non-tariff barriers, and the removal of a requirement for U.S. social media platforms and cloud service providers to contribute part of their Malaysian revenues to a state fund.
Last week, Tengku Zafrul said Malaysia had secured tariff exemptions on its pharmaceutical products and semiconductors exported to the United States, and was seeking further cut-outs for commodities such as cocoa, rubber and palm oil.
On Monday, however, he warned that semiconductor chips may still be subject to additional tariffs under U.S. laws based on national security reasons.
"Therefore, we need to continue to be prepared for any possible additional tariffs imposed on the semiconductor industry," he said. - Reuters
