PETALING JAYA: The reduction in the United States' reciprocal tariff rate from 25% to 19% on Malaysian goods is a significant achievement and displays Malaysia's thorough and methodical negotiating process and strong inter-agency coordination, says Tengku Datuk Seri Zafrul Abdul Aziz.
The Investment, Trade and Industry Ministry said the reduced rate was a result of sustained engagement with the United States through various bilateral platforms.
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"The 19% rate roughly tracks the rate of other countries in the South-East Asian region.
"Most importantly, Malaysia stood firm on various 'red line' items, and the 19% tariff rate was achieved without compromising the nation's sovereign right to implement key policies to support the nation's socio-economic stability and growth," he said in a statement on Friday (Aug 1).
"To manage the implications of the 19% tariff rate, the ministry will continue to collaborate with other ministries and agencies to cushion the effects on Malaysian exporters," he said, adding efforts would also be made to support small and medium enterprises to adjust to the new tariff rate.
Tengku Zafrul pointed out that the United States remains Malaysia's biggest export market valued at RM198.65bil and the top source of foreign investment with approved investments amounting to RM32.82bil in 2024.
The 19% US tariff rate takes effect in seven days and applies to goods entering the United States for consumption, with limited exceptions for shipments already in transit.
Signed on July 31, 2025, the order amends Executive Order 14257 and imposes revised ad valorem duties on multiple trading partners, including all major Asean nations.
Malaysia, Thailand, Indonesia, the Philippines and Cambodia each face a 19% rate, with Vietnam slightly higher at 20%.
Singapore continues to receive the lowest tariff rate among Asean nations at 10% but Laos and Myanmar face the highest at 40%.
