PETALING JAYA: Malaysia is not looking at retaliatory tariffs against the United States after it was hit with a 10% tariff hike and reciprocal tariff by President Donald Trump’s administration, says the Investment, Trade and Industry Ministry (Miti).
In an immediate reaction to the announcement on Thursday (April 3) Malaysian time, the ministry said it views the tariffs seriously and is actively engaging with US authorities to seek solutions that will uphold the spirit of free and fair trade.
“In upholding this spirit, Malaysia is not considering retaliatory tariffs,” it said in a statement.
“The US tariffs affect many countries with potentially significant implications for global trade and growth.”
ALSO READ: Trump announces tariffs, Malaysia at 24%
Citing data from the US Bureau of Economic Analysis, Miti said Malaysia ranks 15th on the US list with a trade surplus of US$24.8bil (RM110.79bil) last year.
“Despite the trade deficit in goods, the United States enjoys a trade surplus in services with Malaysia, reflecting strong bilateral economic ties that support jobs and economic growth for both nations.
"It must be highlighted that the trade deficit is also because many US firms have been operating in Malaysia for decades, on account of Malaysia’s well-established industrial ecosystem, especially in the electrical and electronic sector.
"We acknowledge that President Trump's tariff hike poses a significant challenge to global trade dynamics," it said.
Miti said Malaysia strongly believes in constructive engagement for mutually beneficial economic relations, and is committed to safeguarding Malaysia's economic interests while maintaining strong trade relations with the United States.
ALSO READ: Trump’s tariffs on Asean: Nothing to dread, everything to fear
Malaysia would also utilise the Trade and Investment Framework Agreement (Tifa) to seek reciprocal trade gains and pursue a Technology Safeguards Agreement with the United States to facilitate high-tech cooperation in semiconductors, aerospace, and digital economy sectors, it added.
The National Geoeconomic Command Centre (NGCC), which was recently given the green light by the Cabinet, will also evaluate the impact of the tariffs and look into a comprehensive and multi-pronged strategy to mitigate its effects on the Malaysian economy and industries, it said.
The NGCC will be chaired by the Prime Minister with Miti as the secretariat and features high-level representatives from key ministries and agencies.
“The NGCC’s key focus is to ensure the Malaysian economy remains competitive amidst these volatile times.
"At the regional level, the first meeting of the Asean Geoeconomic Task Force – established at the Asean Economic Ministers’ Retreat in February – will also commence soon,” it said.
ALSO READ: Trump tariffs: Hitting close ally Singapore ‘a surprise’, says ex-senior US trade official
The ministry also said that to mitigate tariff impact, Malaysia will expand its export markets by prioritising high-growth regions and leveraging existing free trade agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP).
It will also foster new partnerships within Asean and enhance Malaysia’s supply chain resilience by accelerating the implementation of key industrial policies like the New Industrial Master Plan 2030 (NIMP 2030) and the National Energy Transition Roadmap (NETR), it said.
“The government is engaging with the affected industries, while exploring support programmes to help businesses adapt. Miti remains committed to open dialogue and collaboration to resolve trade disputes and promote mutual prosperity,” it added.
ALSO READ: China vows retaliation as Trump unleashes ‘bazooka’ US tariffs
According to the ministry, Malaysia's diversified markets and products, coupled with strong demand, would provide the country with a buffer for the immediate future.
"Furthermore, domestic demand, which is our main driver of growth, remains robust,” it added.
The ministry said the Malaysian economy would remain resilient amid these challenges.
The 24% tariff on goods entering the United States will begin on April 9, as Trump announced new import duties on his country's trading partners.
