KUALA LUMPUR: As tariff negotiations with the United States go on, Malaysia has made it clear that it will not reach a deal just for the sake of it.
“If the deal does not benefit Malaysia, we should not have a deal. We have to be firm on that,” said Tengku Datuk Seri Zafrul Abdul Aziz.
“If we can reach a deal that on balance benefits Malaysia, benefits Malaysian companies, benefits Malaysians, then yes.”
However, the Investment, Trade and Industry Minister said not all issues are non-negotiable.
On halal certification, Tengku Zafrul said Malaysia is open to engaging with US exporters – but only if they comply with domestic requirements.
“They want to export their agricultural products. Right now, for example, we don’t allow the import of beef and poultry from the US. They are asking why.
“But it’s not a red line for us – we can allow it, as long as their products meet our standards,” he said.
However, issues related to legal and policy sovereignty are off the table, he said.
“We discussed our right to impose a digital tax. That is one of our red lines, and we view it as our sovereign right,” he said.
Other red lines include newly passed laws on digital commerce, government procurement and standards tied to health or technical matters.
Malaysia, he said, needs to be more competitive and innovative in the face of challenges brought about by the United States’ decision to slap a 25% tariff on goods.
To that end, the government is focused on strengthening the domestic business ecosystem, diversifying trade links and improving export capabilities.
“Malaysia has to continue to focus on improving the strength of our companies and the fundamentals of our economy. That is what’s going to drive Malaysia,” he said, adding that broader trade strategies – including the National Industrial Master Plan (NIMP), National Energy Transition Roadmap (NETR) and the upcoming National Semiconductor Strategy – remain key priorities.
He said Malaysia is already drawing up mitigation measures to respond to global trade shifts.
“We need to be more competitive and innovative. We need to ensure that we move up the value chain to sustain our growth,” he said.
Tengku Zafrul pointed out that Malaysia’s trade-to-gross domestic product (GDP) ratio last year stood at 150%.
The United States accounts for roughly 15% of Malaysia’s total trade – with about RM200bil in exports alone last year.
Despite the uncertainties, he said Malaysia’s official GDP growth forecast remains unchanged at between 4.5% and 5.5%.
He said Malaysia is taking a measured approach in the ongoing tariff negotiations, mindful of broader economic implications and existing trade commitments.
“Looking at our country’s economy and our policies, we have achieved the kind of growth that we have today because of the balance in supporting key industries.
“Whatever we give to the United States, we need to give to the rest. We have Free Trade Agreements (FTAs). So we have to be fair to all the countries, not just the one country that does 15% of our total trade. There’s another 85%,” he said.
Malaysia’s applied tariff rate on US imports already stands at 5.6%.
“How low can we go?” he added.
“Most companies are worried. Naturally, they will speed up some exports and also increase inventory.
“We will continue (the negotiations) where we stopped. We were actually in the midst of asking for an extension. That’s the truth,” he said.
“When you negotiate, the devil is in the details. So that is where sometimes time is required.”
