PETALING JAYA: More constructive talks are needed between Malaysia and the United States towards greater transparency with regard to its trade information, says the Malaysian Iron and Steel Industry Federation (MISIF).
The federation’s call comes in light of the US Trade Representative (USTR) probe against 16 economies around the world.
It noted that the probe seems to be part of a broader review covering multiple sectors and trading partners.
“Malaysia should continue to engage constructively with US authorities and provide transparent information on production, capacity and trade flows,” MISIF said in a statement.
The federation also calls for continuous engagement between the government, industry stakeholders and international partners to address concerns based on evidence-based discussions.
On Thursday, the USTR said that a large or persistent goods trade surplus is evidence of structural excess capacity and production in 16 economies.
They include those of China, the European Union, Japan, South Korea, Singapore, Bangladesh, Switzerland, Norway, India, Mexico, Taiwan, Vietnam, Thailand, Indonesia and Cambodia.
As for Malaysia, among the areas highlighted was the significant excess capacity in its steel sector.
The sector recorded capacity growth of 22% between 2018 and 2022, despite a 25% decline in steel demand during that period.
MISIF explained that the nation’s steel capacity expansion was primarily developed between 2018 and 2022 to reduce dependence on imported steel and strengthen domestic supply resilience.
It noted there was decline in the demand for steel during the Covid-19 pandemic (2019-2022) which temporarily slowed construction and industrial activity.
At the same time, the federation added that industries faced a challenging domestic environment with increased import competition and slower demand growth.
Recognising these challenges, the government took proactive measures to ensure a sustainable industry structure.
These include a moratorium on new steel manufacturing licences imposed by the Investment, Trade and Industry Ministry, the setting up of the Steel Independent Committee in 2024 and the launching of the Steel Industry Roadmap 2030 in September last year.
On bilateral trade, the federation said that Malaysia’s steel exports to the US remain modest, which were further affected by the increase in tariffs under Section 232 of the Trade Expansion Act of 1962, raised from 25% to 50% in June 2025.
MISIF said the imbalance in the industry has been driven by several factors, including economic downturns, government interventions and market-distorting practices.
A major contributor has been the rapid expansion of China’s steel sector over the past two decades.
As domestic demand slowed, excess production was increasingly exported to international markets.
In 2025, China’s steel exports reached approximately 119 million tonnes, the highest level since 2015, highlighting the scale of global supply pressures.
